Consumers: Home Appraisals Still Falling Short

Appraisals continue to lag homeowners’ price expectations, according to the latest Quicken Loans’ National Home Price Perception Index, which compares homeowners’ initial estimates and appraiser’s opinions of home values. Appraised values were 1.35 percent lower than homeowners’ expectations in August. That has narrowed from a 1.55 percent difference in July.

Many homeowners are still not understanding their home’s current value, according to the analysis. The perceptions can vary quite a bit across the country, too. For example, home values are 3 percent higher than homeowners’ estimated values in the West, while they are 3 percent lower than expected in the Midwest and Northeast.

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Home Owners Overestimate Their Equity

The amount home owners estimate their home is worth is growing out of proportion with appraisers’ estimates, with the gap widening for the first time in six months, according to Quicken Loans’ latest Home Price Perception Index.

On average, appraisers’ estimates were about 2 percent lower than what home owners expected in February. The Quicken Loans study compares actual appraised values to what home owners who are refinancing estimate their home is worth at the beginning of the mortgage process.

Appraisers’ estimates were most often higher than home owners’ in the Western region of the country.

Source: Quicken Loans