Are You Overestimating The Value Of Your Home?

A recent study by Quicken Loans Inc. revealed a growing disparity between appraiser and homeowner opinions of home worth. While home values have generally increased from month to month over the past year, homeowners’ perceptions of home value have become increasingly inflated relative to appraiser valuations.

Homeowners’ Price Perception

In the study, the difference between homeowner estimates of home worth and appraiser valuations was measured using Quicken Loans’ Home Price Perception Index (HPPI). The HPPI was determined by comparing the difference between the homeowner’s estimated home value as listed on the mortgage application with the appraised value of the home.

Related Link: Quicken Loans: Home Prices Not Expected To Remain Static

Although the HPPI indicates that appraisals, on average, consistently exceeded homeowners’ estimates throughout 2014, appraiser opinions of home value fell from 0.40 percent to 0.69 percent below homeowner estimates from March to April.

Appraisers’ Valuation

The Quicken Loans study also compared the trends for HPPI to those for Home Value Index (HVI), which reflects only the appraised value of the home.

While the national HVI fell slightly in March, the HVI for April showed an average increase of 0.28 percent in home value. Both HVI and HPPI were calculated using Quicken Loans’ mortgage data from over 3000 counties across the U.S, including four geographic and 27 metropolitan areas.

Valuation By Location

While average home values in the U.S. have risen 5.54 percent since April 2014, home values in the West have exceeded the average HVI by 1.02 percent.

With regards to HPPI, homeowner estimates in 63 percent of the metropolitan areas surveyed—including San Francisco, Houston, and Miami—have continued to exceed appraiser valuations since April 2014.