Quicken: Home Values at 12-Year High; Owner Perceptions Improve

Quicken Loans, Detroit, said home values rose by 0.6% nationally in July and posted a 4.78% year over year increase to their highest point since January 2007.

Quicken also reported its monthly national Home Price Perceptions Index showed the average home appraisal in July came in an average of 0.63% lower than owners’ estimates, marking the third consecutive month of a tightening gap between these data points, showing that owners are becoming more in tune with their homes’ current value.

Of 27 metro areas analyzed, 20 had less than a 1% difference between perceived and actual home values, while only two report a greater than 1.5% difference: owners in Charlotte, N.C., have homes worth an average of 1.92% more than their expectations, while Chicago homes are valued and average of 1.66% less than their owners estimate.

“As expected, with mortgage rates at three-year lows and the refinance share of mortgage activity continuing to hover above 50%, homeowners are increasingly aware of the true value of their home,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Prices continue to increase in most areas but the rapid growth of years past has moderated giving homeowners a better sense of their home’s market value.”

Quicken reported appraisal values rose in every region, with the Northeast experiencing a 1.34% increase in home values and the South measuring a 0.04% bump in appraisal values. All regions saw significant year-over-over increases, ranging from 3.51% in the South to 5.45% in the Midwest.

“The 1% drop in interest rates so far this year will help address affordability but the strength of the economy and a lack of new homes being built will also play a big role,” Banfield said.