TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/595032
o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS 50 | Th e M Rep o RT The LaTesT Homeowners continue to overvalue Homes for eighth consecutive Month While homeowners still overvalue their homes, the gap between homeowners' estimates and appraisers' valuations is closing. H omeowners continued to overvalue their homes for the eighth consecutive month in September, while appraiser opin- ions came in 2 percent lower than owner's perceptions, according to Quicken Loans' national Home Price Perception Index (HPPI). The HPPI, which compares the estimate the homeowner supplies on a refinance mortgage application to the appraisal performed later in the mortgage process, found that September was the first month the gap between homeowners and appraisers narrowed since the trend began in February 2015. Last month, homeowners' estimates were 2.65 percent higher than appraisers'. Quicken Loans Home Value Index (HVI) showed average home values were mostly flat, increasing only 0.05 percent in September and making up for the exact same loss experienced in August. However, annually, home values rose 3.11 percent compared to September 2014. In August, home values rose 3.24 percent annually. The Western region posted the largest gains, with 0.72 percent monthly and 6.03 percent annual increases. The South experienced a 0.29 percent monthly gain and a 3.33 percent annual gain. The Northeast and Midwest regions posted both monthly and annual home value losses. "I don't think it's a coincidence the West is showing the greatest home value increases with almost all of the western cities measured in the HPPI exhibiting appraiser opinions higher than homeowner estimates," Bob Walters, chief econ- omist at Qucken Loans explained. "Homeowners are hearing national reports of slower home value increases, or even drops in value, when that isn't the case everywhere. Appraisals are telling a different story in many western cities but homeowners may not realize home values are still mak- ing such strides," he said. Walters also noted that homeowners still underwater are looking for large increases, but increases could push homebuyers out of the market. "Home affordability could become a worry if home value increases get too far ahead of the modest pace of wage increases, which are sitting at about 2 per- cent annually," he said.