Quicken Loans Study: Less Than Half a Percent Difference Between Owner and Appraiser Opinions of Home Values

– Quicken Loans’ National HPPI shows appraised values 0.45% lower than homeowners estimated in December

– Home values rose 0.79% nationally in December, and posted a 5.15% year-over-year increase, according to the Quicken Loans HVI

Detroit, MI – Jan. 8, 2019 (PRNewswire) The year ended with owner and appraiser perceptions of home values slightly moving in different directions, although the difference remains less than half a percent nationally. Appraisal values were an average of 0.45 percent lower than homeowners expected in December, according to the National Quicken Loans Home Price Perception Index (HPPI). This is compared to November, when there was just a 0.36 difference between the two data points.

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Despite the dip in perception, appraisal values themselves rose in December at a faster pace than they did in November. The National Quicken Loans Home Value Index (HVI) reported a 0.79 percent monthly increase in the average appraisal value. The national index also showed the average appraisal jumped 5.15 percent year-over-year.

Home Price Perception Index (HPPI)

The HPPI – Quicken Loans’ exclusive measure of homeowners’ opinion of home values – continued to show a small difference between owners’ and appraisers’ opinions on a national level, but the appraisals in the vast majority of metro areas were higher than the owner expected in December. Homeowners in Boston, for example, saw appraisals coming back an average of 2.98 percent higher than what the homeowners expected. Based on the area’s median home value, that is an average of about $15,000 in extra equity the owners don’t realize they had.

“Many consumers don’t think about their home’s value until they start thinking about selling it. They may not be watching their local housing market as closely as appraisers who are reviewing home sales every day – leading the owners to incorrectly estimate their home’s value,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “The fact of the matter is that the there are many ways a homeowner can make their equity can work for them if they have a realistic estimate of their home’s value. Tapping into home equity to consolidate high-interest debt, or make home improvements are very popular options right now.”

Home Value Index (HVI)

The Quicken Loans HVI, the only measure of home value change based exclusively on appraisal data, reported increasingly rising appraisal values across the country. The National HVI showed that home values rose steadily from November to December, increasing 0.79 percent. The annual growth is even stronger, with the average appraisal rising 5.15 percent over last year’s level. Another sign of the housing market’s health is that all four regions measured by the study reported modest growth on both the monthly and annual measures. The appraisal values ranged from 4.41 percent annual growth in the Northeast to a 5.98 percent year-over-year increase in the West.

“Any consumer who has read recent news about the housing market and has the impression that it is slowing to a halt should see that the HVI proves that this could not be farther from the truth,” said Banfield. “Home value growth is now at a more normal, sustainable clip – keeping pace with inflation and wage growth more than we have seen in the past few years.”

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* A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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*A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.

The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation’s largest home mortgage lender. The company closed nearly half a trillion dollars of mortgage volume across all 50 states from 2013 through 2018. Quicken Loans moved its headquarters to downtown Detroit in 2010. Today, Quicken Loans and its Family of Companies employ more than 17,000 full-time team members in Detroit’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Phoenix. Quicken Loans also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked highest in the country for customer satisfaction for primary mortgage origination by J.D. Power for the past nine consecutive years, 2010 – 2018, and also ranked highest in the country for customer satisfaction among all mortgage servicers the past five consecutive years, 2014 – 2018.

Quicken Loans was once again named to FORTUNE magazine’s “100 Best Companies to Work For” list in 2018 and has been included in the magazine’s top 1/3rd of companies named to the list for the past 15 consecutive years. In addition, Essence Magazine named Quicken Loans “#1 Place to Work in the Country for African Americans.”

Home Values Growing Fastest in Markets with Strictest Land-Use Regulations

Despite similar job growth, markets with the most restrictive land-use regulations saw much steeper home-value appreciation than those with lighter regulations

Seattle, WA – Aug. 2, 2018 (PRNewswire) As the economy has recovered, both the job market and home values have seen strong growth. But in places where residential land use has the strictest regulations, and which often struggle to accommodate new housing, strong job growth is associated with a much larger increase in home values.

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Using the Wharton Residential Land Use Regulation Index[i], Zillow® compared job growth[ii] and home value appreciation since 2010, grouping markets by how strict their regulations are. Job growth overall is correlated with home value growth, but how much home values grew in a given market depended in part on the regulations builders face when adding new homes, including density laws and permit review times.

Between 2010 and 2017, home values across the country increased by 14 percentage-points for every 10 percentage-point increase in jobs. In markets with the most restrictive regulations, home values grew 25 percentage-points for every 10 percentage-point increase in employment over that same time period.

In San Francisco, where strict regulations are combined with physical land limitations, home values rose 58.8 percent between 2010 and 2017 as employment grew 23.2 percent during those years. Similarly, Miami home values grew 62.5 percent as jobs grew 19.2 percent.

Home value appreciation was smaller in areas with less-strict regulations. Job growth in Dallas, a moderately restrictive market, was similar to that in San Francisco, but home value growth was milder, increasing 37.1 percent.

“As the housing market has recovered from the Great Recession and collapse in home values, a new challenge emerged that is driving market dynamics – the shortage of homes for potential buyers,” said Zillow Senior Economist Aaron Terrazas. “We’ve seen inventory falling on an annual basis for more than three years now. As a result of job and population growth, housing demand has overwhelmed the inventory of pre-existing homes and builders are facing a number of challenges in adding new supply, including regulatory costs. In hot job markets with some of the strictest laws about building new residential housing, home values experience the most pressure. It’s helped home values recover and exceed their previous highs, but leaves many home shoppers unable to break into the market.”

Growing job markets add to the demand for housing, and the number of homes[iii] increased as employment grew, regardless of how strict the regulations are. However, markets with the most restrictive laws added less housing than places with easier building laws. Between 2010 and 2017, markets with the tightest building regulations increased their housing stock by 4.4 percent, while markets with the loosest restrictions added 4.6 percent more homes.

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Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

[i] The most comprehensive nationwide effort to summarize regulatory conditions is the Wharton Residential Land Use Regulation Index, which compiles the results of a survey sent to city planners across the country in 2007. This analysis used the index to categorize all the metropolitan areas with survey responses into three groups: those with the most restrictive, moderately restrictive, and least restrictive regulations.

[ii] Jobs data comes from the Bureau of Labor Statistics

[iii] Housing stock data comes from the U.S. Census Bureau

Half of All U.S. Homes Are More Valuable than Pre-Recession Peak

– In seven of the 35 largest U.S. housing markets, more than 95 percent of homes are worth more than their peak value during the housing boom

– The median U.S. home value is $217,300, up 8.3 percent over the past year.

– Home values are 8.4 percent higher than they were at the height of the housing bubble.

– Median rent rose 1.3 percent over the past year to $1,440. Riverside, Calif. saw the greatest increase in rent.

– Inventory fell 4.8 percent over the past year, after falling 12.3 percent the year before.

Seattle, WA – July 26, 2018 (PRNewswire) A decade after the U.S. housing market crashed, half of the country’s homes have regained the value they lost during the recession, according to the June Zillow® Real Estate Market Report(i).

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Nationally, the median home value is $217,300, up 8.3 percent over the past year and 8.4 percent above the highest point of the housing bubble. The median home value has surpassed its bubble peak level in 21 of the nation’s 35 largest housing markets.

In places that have seen some of the strongest growth since the market crashed, nearly every home is now more valuable than it was during the boom years. In Denver, the typical home is worth $397,700, which is 65.6 percent higher than its highest point in June 2006. In that market, 99.6 percent of all homes are worth more than they were during the bubble.

While half of the country’s homes have regained all of their lost value, several markets are still trailing in the housing recovery. Despite strong median home-value growth in recent months in Las Vegas – home values have grown at a double-digit pace for 15 consecutive months – less than 1 percent of homes there have fully recovered from the housing bust.

“Even a decade after the 2008 Financial Crisis, and five-plus years into the recovery, it’s clear that the housing boom and bust was felt very differently in various markets – and is still being felt today in many,” said Zillow Senior Economist Aaron Terrazas. “In markets like Las Vegas that got farthest ahead of themselves during the boom, and consequently fell the most, a large majority of homes are still not worth as much today as they were a decade ago. But in markets like Denver that were more stable a decade ago, many more homes are worth more now than ever before. Despite widespread and consistent home value growth today, the scars of the recession still run deep for millions of longer-term U.S. homeowners, and it may take years of growth for their home to regain the value lost a decade ago. And while stabilizing growth in rents is likely a relief for those renters saving to become homeowners, many of those would-be buyers in a number of the nation’s hottest markets will be contending with home prices that are as high as they’ve ever been.”

Rents rose at a 1.3 percent pace over the past year to a median of $1,440. Rent appreciation has slowed nationwide for four straight months and has now been below the overall rate of inflation for two consecutive months.

Riverside and Sacramento saw the greatest annual rent increases among the nation’s largest metros, with rents growing by more than 5 percent in each market.

A limited supply of homes for sale remains a challenge for home shoppers. Inventory was down 4.8 percent from this time a year ago, although the pace of the decline has slowed considerably. In June 2017, inventory was falling at a 12.3 percent annual pace. Atlanta saw the biggest annual decline in inventory, falling 15.7 percent from June 2017.

Mortgage rates on Zillow(ii) started and ended June at 4.33 percent. Mortgage rates peaked in mid-June(iii) at 4.43 percent. They hit the lowest point late in June(iv) at 4.32 percent, before returning to 4.33 percent to end the month. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

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Zillow

Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow’s Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder’s office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.

(ii) Mortgage rates for a 30-year fixed mortgage.

(iii) Month high was on June 11.

(iv) Month low was on June 27 and June 28.