Home value growth is cooling. Even so, homeowners and appraisers are still generally simpatico about what those values should be. Such is the conclusion presented by Quicken Loans, whose latest Home Price Perception Index [1], or HPPI, finds October to be the eighth straight month with less than half a percent difference between appraisals and homeowner estimates.
Actually, October's differential was a lot closer to a quarter percent. Last month, appraised values were an average of 0.28 percent lower than owners expected, nationally, according to the HPPI.
Quicken Loans called the stat “a vast improvement over the last year, when there was nearly a 1 percent difference between the two data points.”
When viewed by the metro area, appraisals range from 2 percent lower than what the homeowners estimated in Chicago to nearly 3 percent higher than expected in Boston, according to the report.
What this means for the loan process, said Bill Banfield, Quicken Loans' executive vice president of capital markets, is that “mortgages are less likely to run into snags. With the combination of a better understanding of appraisal values, and continued home value increases, this could be a good time for homeowners to tap into their growing equity to pay off higher interest debt or make home improvements.”
But while home owners are generally seeing eye-to-eye with appraisers, home value growth is starting to slip. According to Quicken Loans, appraised values in October were 4.39 percent above where they were a year ago. Growth, yes, and still outpacing inflation, but it's the lowest year-over-year increase Quicken Loans has seen in the last twelve months.
Also during October, appraised values decreased half a percent from September.
Home value growth was most sluggish in the Northeast, with a 2.59 percent annual increase in appraised values and a 0.48 percent decline month-over-month.
“The pace of home price growth appears to be moderating and varies by region representing a healthy adjustment to strong price gains of the past,” Banfield said. “Slower gains in prices can balance out changes in interest rates affecting affordability for those looking to purchase a new home.”