Quicken: Home Values See Largest Monthly Increase in 5 Years
Quicken Loans, Detroit, said the average home appraisal came in 2.15% higher in September, from August, the largest monthly increase in more than five years.
The company’s monthly Home Value Index said annual growth in September was even more impressive, increasing by 6.52% year-over-year, nearly two percentage points higher than the annual growth reported in August. Every region showed improvement both monthly and annually, with the South showing modest home appraisal growth with an 0.26% monthly increase and 4.28% growth year-over-year. The West boasted the largest monthly jump of 2.93%, but the Midwest achieved the largest annual improvement, reporting a 6.34% increase in average appraised value.
Quicken’s National Home Price Perception Index reported homeowners are moving closer to understanding their home’s true value. The report showed the average home appraisal in September was just 0.49% lower than what homeowners expected.
Quicken Executive Vice President of Capital Markets Bill Banfield noted “positive movement” toward equilibrium between owners’ estimates and appraisers’ opinions, considering the data from August showed appraisals 0.64% less than what was expected.
“The clear news from the HPPI data is that homebuyer interest is not falling with the leaves,” Banfield said. “Despite the start of the school year, and the introduction of cooler temperatures in parts of the country, home shoppers are still active. Buyer interest, combined with persistently low home inventory, continues to drag up home values. With August’s jump in home building, at its highest level in 12 years there could be some hope on horizon for home shoppers who haven’t been able to find a home that is a perfect fit at the right price.”
The report said many of the nation’s largest metro areas mirrored the positive national trend, as the average appraisal was higher than expected in 55% of the metro areas studied. Conversely, all metros with average appraisals lower than the homeowners’ estimate had a less than 2% gap between the expectation and the actual appraised value. Boston and Charlotte had the largest spread, showing homeowners underestimated their value, with average appraisals 1.71% and 1.61% higher than owner estimates. Chicago remains the city whose homeowners overestimated their homes’ value the most, although by only 1.67%.
