Home appraisals were more likely be in line with--or even higher than--owners' estimates in April, according to the National Quicken Loans Home Price Perception Index (HPPI) out Tuesday.
Appraised values were only 0.33 percent lower than what homeowners expected . The positive trend was apparent at the local level as well. Only five of the 27 metro areas observed in the HPPI reported appraisals lower than what owners estimated.
While they are more in line with what owners expected, home values are continuing their ascent over last year's level. The National Quicken Loans Home Value Index (HVI) reported a healthy 6.47% year-over-year increase, despite near stagnant monthly change, with a 0.05% dip in home values since March.
Home Price Perception Index (HPPI)
The 0.33% gap between appraisal and expectation is a move closer to equilibrium and the closest the national appraiser and owner opinions have been in more than three years. Homeowner opinions are also improving when viewed locally. Less than 20% of the areas measured have appraisal values lower than estimated. San Jose is leading the way with the average appraisal 2.75% higher than expected and Chicago is trailing all cities with appraisals an average of 1.68% lower than estimated.
"The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process," said Bill Banfield, Quicken Loans executive vp of capital markets. "The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home."
Home Value Index (HVI)
The Quicken Loans HVI, the only measurement of home value changes based solely on appraisal data, showed annual growth in the national index, increasing 6.47% from this time last year. Monthly changes were more tempered, with the national index dipping 0.05%. The national index was pulled into the negative by the Northeast, the only region showing a decrease in home value at a 1.24% decline. The Northeast was still the lowest when reviewing annual changes however all regions were positive – ranging from the Northeast's 2.22% growth to the 9.44% jump in the West.
"The skyrocketing home values in the West is a trend with no end in sight. Until home building pace picks up, in combination with more existing homes being listed for sale, affordability will continue to wane," Banfield said. "The other regions of the country are showing annual price gains as well but at a more moderate pace. Time will tell if the slightly higher interest rates in 2018 start to slow demand or if the inventory shortage ends up being a larger contributor to price changes."
HVI April 2018
January 2005 = 100 | HVI April 2018 vs. March 2018 % Change | HVI April 2018 vs. April 2017 % Change | HPPI April 2018
Appraiser Value vs. Homeowner Perception of Value* | HPPI April 2017
Appraiser Value vs. Homeowner Perception of Value* | |
| National Composite | 108.09 | -0.05% | +6.47% | -0.33% | -1.90% |
*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.
Geographic Regions
| HVI April 2018
January 2005 = 100 | HVI April 2018 vs. March 2018 % Change | HVI April 2018 vs. April 2017 % Change | HPPI April 2018
Appraiser Value vs. Homeowner Perception of Value* | HPPI April 2017
Appraiser Value vs. Homeowner Perception of Value* |
| West | 133.56 | +0.53% | +9.44% | -0.08% | -1.65% |
| South | 109.87 | +0.32% | +5.86% | -0.38% | -1.83% |
| Northeast | 99.43 | -1.24% | +2.22% | -0.41% | -2.17% |
| Midwest | 88.99 | +0.93% | +5.81% | -0.47% | -2.02% |
*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.
Metropolitan Areas
| HPPI April 2018
Appraiser Value vs. Homeowner Perception of Value* | HPPI March 2018
Appraiser Value vs. Homeowner Perception of Value* | HPPI April 2017
Appraiser Value vs. Homeowner Perception of Value* |
| San Jose, CA | +2.75% | +2.71% | +0.72% |
| Dallas, TX | +2.40% | +2.61% | +2.55% |
| Boston, MA | +2.23% | +2.40% | +0.82% |
| Denver, CO | +2.22% | +2.26% | +2.72% |
| San Francisco, CA | +2.06% | +1.99% | +1.10% |
| Seattle, WA | +2.02% | +2.20% | +1.32% |
| Minneapolis, MN | +1.83% | +1.53% | +0.42% |
| San Diego, CA | +1.40% | +1.41% | +0.42% |
| Charlotte, NC | +1.22% | +1.22% | +0.53% |
| Kansas City, MO | +1.05% | +1.09% | +0.32% |
| Riverside, CA | +0.96% | +0.84% | -0.16% |
| Detroit, MI | +0.93% | +0.69% | -1.19% |
| Portland, OR | +0.81% | +1.03% | +1.44% |
| Las Vegas, NV | +0.79% | +0.72% | -0.38% |
| Los Angeles, CA | +0.76% | +0.91% | +0.99% |
| Sacramento, CA | +0.73% | +0.72% | +0.50% |
| New York, NY | +0.66% | +0.42% | -1.86% |
| Miami, FL | +0.65% | +0.66% | +0.44% |
| Washington, D.C. | +0.52% | +0.46% | -1.05% |
| Phoenix, AZ | +0.41% | +0.40% | -0.37% |
| Tampa, FL | +0.31% | +0.21% | -1.38% |
| Atlanta, GA | +0.07% | +0.06% | -1.11% |
| Houston, TX | -1.16% | -0.92% | +0.45% |
| Baltimore, MD | -1.17% | -1.18% | -3.01% |
| Philadelphia, PA | -1.37% | -1.62% | -3.37% |
| Cleveland, OH | -1.59% | -1.44% | -2.26% |
| Chicago, IL | -1.68% | -1.47% | -2.37% |
*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.
