Quicken: Owner Perceptions of Home Values Improve for 2nd Straight Month
MBA NewsLink Staff
Quicken Loans, Detroit, said the average home appraisal in June was 0.71% lower than owners' estimates, according to its National Home Price Perceptions Index.
Quicken said after six months of growing gaps, June was the second month in a row that the two data points tightened, showing that owners and appraisers share similar opinions on of home values nationwide as spring home buying season gives way to summer.
The analysis noted declining margin between the two data points reflects the tightening perceptions in the metro areas studied, with only three cities having reporting a 1.5% difference between perceived and actual home values. Chicago and Philadelphia had their homes appraise an average of 1.52% and 1.69% lower than what homeowners expected, respectively. On the other hand, Charlotte-area homes appraised and average of 2.01% higher than what homeowners estimated.
"The refinance share of mortgage activity is at its highest rate since January of 2018, and it appears that homeowners have done their due diligence on their home's value as millions across the country refinance their home loans," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "This decline in the discrepancy between perceived and appraised value should encourage homeowners who are contemplating a refinance, knowing that appraisals are not likely to disrupt the process when they take advantage of low rates."
The Quicken Loans' Home Value Index shows that appraised values rebounded from May's more than 1% decline, as the average home appraised 0.56% higher in June. Additionally, the average home increased in value by 4.78% since June of last year, providing significant equity to millions of homeowners.
The increase in appraisal values is due in large part to the West, where home values experienced a 1.87% jump, leading the nation. The Northeast experienced a 1.00% month-over-month increase. While the Midwest and South experienced decreases in appraisal values, both were less than 0.25%. All regions have reported year-over-year increases in appraisal values, ranging from 3.83% in the South to 5.20% in the West.