Quicken Loans, the nation’s second-largest retail mortgage lender, reported March 10 appraisers valued homes 0.13 percent lower than homeowners estimated in February, according to the company’s national Home Price Perception Index (HPPI). This is the first time appraiser opinions fell below homeowner estimates since August 2013.
This signals a noticeable drop from January, when appraiser opinions were 0.18 percent higher than homeowners’ estimates of value. Despite the drop in the national HPPI, appraiser opinions remain higher than homeowner estimates in 18 of the 27 metro areas analyzed by the HPPI. Two cities of note are Baltimore and Atlanta, both of which moved from a positive to negative HPPI value — meaning appraisers now have a lower opinion of value than homeowners in these cities, dragging down the national average.
“While it’s significant that appraiser opinions are now lower than homeowners’ nationally, this minimal difference is unlikely to derail a refinance or cause headaches for the homeowner,” Quicken Loans Chief Economist Bob Walters said. “The dip in the HPPI is likely caused by a delay of homeowner perceptions. As the economy recovered, homeowners hadn’t realized property values had improved. With the headlines of growing home prices, homeowners are catching up, but are now a bit overzealous in their estimates.”
The Quicken Loans Home Value Index (HVI), also released, showed home values continued at a healthy pace. Nationally, values increased 1 percent from January to February, and grew 8.45 percent from the year prior.
February’s measure of home values followed the trend set in January, showing steady, healthy growth. The West region doubled the growth of the national average, with a 2.46 percent home value increase since January. Home values in the South, Northeast and Midwest were nearly flat, with an increase of 0.35 percent and drops of 0.16 and 0.40 percent, respectively.
“The Western region continues to glow red hot, while home values in the rest of the country remain frozen,” Walters said. “The spring home-buying season may be a big market mover, depending on the inventory that is available. Bidding wars from a tight market could cause prices to jump, or we could see more gradual growth in a more balanced market.”
A detailed breakdown of the HPPI and HVI for February are available on Quicken Loans’ website.