Homeowners prefer not to believe their homes have lost value

by Steve Randall10 Apr 2019

The gap between what homeowners applying for a refinance mortgage believe their home is worth and the assessment of an appraiser, has widened.

Quicken Loans’ National Home Price Perception Index (HPPI) expanded to 0.78% in March from 0.50% in February.

"This month's fluctuation in the HPPI was driven more by a dip in home values than a change in the owners' viewpoint. Homeowners are often reluctant to believe their house has lowered in value, even at a slight monthly fluctuation," said Bill Banfield, EVP of Capital Markets for Quicken Loans.

In most areas appraisals are within 1% of homeowners’ perceptions but across the areas measured for the HPPI, Chicago is where owners are overestimating the most (1.94% above appraisals) and Boston owners are underestimating the most (2.23% below appraisals).

"Depending on the area, appraised values are either growing at a much more measured pace or have taken a step back from their meteoric rise,” added Banfield. “Homeowners are usually slower to realize change – in either direction – than the appraisers who study the market on a daily basis. This can lead to a slight widening of the perception gap when there is a turn in the market."

Home Value Index
Meanwhile, Quicken Loans’ National Home Value Index (HVI) shows appraisal values dipped 0.20% from February to March. Home values continued to grow annually, rising 3.37% year-over-year.

This is a slowdown from the growth in February, when appraised values rose 5.47% year-over year.

"Some of the rampant buyer demand that we've seen over the last few years has subsided because of the affordability issues many areas are having, driven by a lack of availability," said Banfield. "Would-be buyers have decided to sit on the sidelines to see if more home inventory becomes available at the price-points where they're shopping. The entire housing industry is watching to see what will happen in the coming months – whether owners and builders will provide the home inventory the buyers have been waiting for, amid the recent drop in interest rates."

Metropolitan

Areas

 

HPPI

March 2019

 

Appraiser Value vs. Homeowner Perception of Value*

HPPI

February 2019

 

Appraiser Value vs. Homeowner Perception of Value*

HPPI

March 2018

 

Appraiser Value vs. Homeowner Perception of Value*

Boston, MA

+2.23%

+2.51%

+2.40%

Charlotte, NC

+2.11%

+2.10%

+1.22%

Denver, CO

+1.58%

+1.98%

+2.26%

Minneapolis, MN

+1.37%

+1.50%

+1.53%

San Jose, CA

+1.27%

+1.63%

+2.71%

Seattle, WA

+1.23%

+1.48%

+2.20%

Las Vegas, NV

+1.16%

+1.09%

+0.72%

Dallas, TX

+0.99%

+1.02%

+2.61%

Atlanta, GA

+0.81%

+0.93%

+0.06%

San Francisco, CA

+0.70%

+0.73%

+1.99%

San Diego, CA

+0.55%

+0.67%

+1.41%

Phoenix, AZ

+0.39%

+0.52%

+0.40%

Washington, D.C.

+0.31%

+0.57%

+0.46%

Portland, OR

+0.30%

+0.26%

+1.03%

Sacramento, CA

+0.28%

+0.46%

+0.72%

Kansas City, MO

+0.24%

+0.43%

+1.09%

Los Angeles, CA

-0.03%

+0.06%

+0.91%

New York, NY

-0.31%

-0.37%

+0.42%

Riverside, CA

-0.32%

-0.02%

+0.84%

Houston, TX

-0.47%

-0.48%

-0.92%

Tampa, FL

-0.59%

-0.57%

+0.21%

Miami, FL

-0.70%

-0.46%

+0.66%

Detroit, MI

-0.88%

-0.70%

+0.69%

Baltimore, MD

-1.08%

-1.12%

-1.18%

Philadelphia, PA

-1.42%

-1.38%

-1.62%

Cleveland, OH

-1.63%

-1.53%

-1.44%

Chicago, IL

-1.94%

-1.93%

-1.47%

*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

 


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