Quicken Loans Study Shows Homeowners and Appraisers Don’t See Eye-to-Eye on Home Values

– Quicken Loans’ National HPPI shows appraised values 1.55% lower than homeowners estimated in July

– Home values rose 0.33% nationally in July, with a 4.21% year-over-year increase, according to the Quicken Loans HVI

Detroit, MI – Aug. 8, 2017 (PRNewswire) Homeowners across the country continue to view their property value higher than appraisers’ opinions. In July, the average spread between an owner’s estimate and the appraised value was 1.55 percent according to Quicken Loans’ National Home Price Perception Index (HPPI). Despite the national average, the range of perceptions varied across the country with valuations coming in higher than expected in some metro areas.

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Even with the varying opinions there has been a clear trend, with home values on the rise across the country. The Quicken Loans National Home Value Index (HVI) reported that appraised values increased an average of 0.33 percent from June to July. The growth is even stronger on a year-over-year basis, with home values rising 4.21 percent nationally from July 2016’s findings.

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Home Price Perception Index (HPPI)
The HPPI shows appraisers’ opinions fell short of homeowners’ expectations by 1.55 percent, in July. This shows a narrowing gap, as homeowner estimates in June were 1.70 percent lower than appraised values. HPPI tracks differing trends across the country as real estate often fluctuates on a local basis. On average, appraisals were higher than owner expectations – the inverse of the national trend – in some of the fastest growing housing markets, including Dallas and Denver. However, some metro areas in the Northeast and the Midwest regions reported appraised values lower than owner estimates at a higher rate than the national trend.

“The home appraisal is one of the most important data points in the mortgage process. It determines the level of equity the homeowner has and, if the owner’s estimate is too far from how the appraiser views the property, it can cause the mortgage to be restructured,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “Our hope is that this index is eye-opening for homeowners. Their home equity could be thousands of dollars higher, or lower, than they realize. If they are aware of the perceived trends in their area it could help them better prepare for their home purchase or refinance.”

Home Value Index (HVI)
The National HVI, based solely on appraisal data, reported home values rose an average of 0.33 percent in July. The positive momentum was even more substantial for the annual measure, showing a 4.21 percent increase year-over-year. All of the areas measured also reported annual home value growth – ranging from a 2.65 percent annual increase in the Northeast to a 5.64 percent annual rise in value in the West.

“The regional differences in home value growth mirror the perception difference across the country. Areas with slower growth were more likely to have owners overestimating their home value, and areas with much stronger growth had higher appraisals than owners realized they would be,” said Banfield. “With home values constantly changing, and the rates of change varying across the country, this is one more way to show how important it is for homeowners to stay aware of their local housing market.”

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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 second largest retail home mortgage lender. The company closed more than $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 17,000 team members from Quicken Loans and its Family of Companies work in the city’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company 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 Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past seven consecutive years, 2010 – 2017, and highest in customer satisfaction among all mortgage servicers the past four years, 2014 – 2017.

Quicken Loans was ranked #10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top-30 companies for the past 14 consecutive years. The company has been recognized as one of Computerworld magazine’s ‘100 Best Places to Work in IT’ the past 13 years, ranking #1 for eight of the past twelve years including 2017. The company is a wholly-owned subsidiary of Rock Holdings, Inc., the parent company of several FinTech and related businesses. Quicken Loans is also the flagship business of Dan Gilbert’s Family of Companies comprising nearly 100 affiliated businesses spanning multiple industries. For more information and company news visit QuickenLoans.com/press-room.

Tax Reform Could Deliver a Tax Hike for Homeowners: New Research

Washington, D.C. – May 18, 2017 (PRNewswire) While tax reform proposals swirling around Washington, D.C., promise lower tax bills for American families, new estimates indicate that many middle-income homeowners may actually see a tax increase if those proposals go through.

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The study, “Impact of Tax Reform Options on Owner-Occupied Housing,” illustrates the effects of a tax plan that echoes certain elements of the “Better Way for Tax Reform” or “Blueprint” proposal released last year, as well as the White House tax reform outline released in April, to which the National Association of Realtors® responded.

While most individuals would see a tax decrease under such a proposal, the study estimates that many middle-class homeowners could in fact see a net average tax increase. Homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815. The study also estimates that combined tax savings from claiming the mortgage interest deduction and real estate property tax deductions would drop 82 percent between the 2018 and 2027 period.

“Tax reform and lower rates are worthy goals, but only if we can achieve them in a fiscally responsible way,” said NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties. “Balancing tax reform on the backs of homeowners isn’t an option.”

The study, which was commissioned by NAR and prepared by PwC (PricewaterhouseCoopers), estimates that this tax increase would result from the interaction of several provisions in the reforms under consideration. For many homeowners that currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction. For others, the elimination of the state and local tax deduction alone would result in higher federal income taxes.

In addition to increasing taxes on many middle-income homeowners, the report finds that such a proposal could cause home values to fall by an average of more than 10 percent in the near term. In areas with higher property taxes or state income taxes, the drop could be even greater. Although the study doesn’t directly analyze the “Better Way for Tax Reform” plan or the recent White House outline, it examines a proposal with many similar elements.

Those elements include lowering and consolidating marginal tax rates to only three rates, setting a top income tax rate of 33 percent, doubling the standard deduction, eliminating all itemized deductions (other than charitable contributions and mortgage interest) and personal exemptions, eliminating the alternative minimum tax, and capping the tax rate on pass-through business income at 25 percent.

PwC estimated that roughly 35 million households will claim the mortgage interest deduction in 2018, three quarters of which have incomes between $50,000 and $200,000. According to NAR, roughly 70 percent of those eligible for the MID claim it in a given tax year.

“A tax reform proposal that hikes taxes for homeowners is a raw deal, and consumers know it,” said Brown. “Leaders in Washington who are driving tax reform have shown every indication that they have the best of intentions, and we’re hopeful they’ll consider our study as this process plays out in the months ahead.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing over 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Video” tab on the website.

Voice for Real Estate – Tax Reform, Selling Solar

NAR President-elect Elizabeth Mendenhall was on Capitol Hill to reinforce REALTORS’ position that any tax reform must protect, not hurt, homeowners. NAR has concerns with the Administration’s proposal because it would hurt homeowners by taking away more deductions than would be offset by the increase in the standard deduction. Also, NAR legal and sustainability staff explain the opportunities and hurdles to selling the increasing number of homes with solar panels.

Millennial Homeowners’ Advice to Peers: Get off the Sidelines

Charlotte, NC – April 12, 2017 (BUSINESS WIRE) Forward-thinking millennials are buying homes – and they are happy about it. While “dreamers” reported last year that they wanted to skip the starter home, Bank of America’s second annual Homebuyer Insights Report revealed that millennials who have taken the plunge into homeownership are buying the house they can afford now and looking ahead to their ideal home in the future. In fact, a large majority (68 percent) of millennial homeowners say their current home is a “stepping stone” to their forever home.

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“After years of seeing millennials sit on the sidelines, it’s clear some are recognizing it might not make sense to wait,” said D. Steve Boland, Consumer Lending executive for Bank of America. “We talk to younger buyers every day about homeownership, and they understand the benefits it can have on their long-term finances. They’re excited to get started but are taking a thoughtful approach by improving their credit and building their savings.”

Millennial homeowners are confident they made the right decision in buying. Nearly 80 percent report homeownership has had a positive impact on their long-term financial picture. A similar number (86 percent) believe owning a home is more affordable than renting. This is in sharp contrast to those consumers who have not yet purchased a home, as they are split on what’s more affordable: 54 percent say owning, compared to 45 percent who say renting.

In further defining homeownership, these 18- to 34-year-old owners are more likely than any other generation to associate it with adulthood (39 percent), and least likely to define it as the American dream (16 percent) and permanence (11 percent).

When looking back at their homebuying experience, current owners across generations would tell their younger selves to start saving sooner (60 percent), consider the maintenance costs and unexpected expenses (42 percent), and create and stick to a budget (35 percent). Twenty-one percent say buy early to build equity.

Prospective buyers are planning, but not pulling the trigger yet

While they are juggling a variety of financial priorities, including paying off debts and bills (61 percent), improving credit scores (47 percent) and paying off student loans (32 percent), nearly one in four prospective buyers see homeownership on the horizon, saying they will purchase their first home within the next two years. Furthermore, 35 percent say they have started to plan for a down payment.

Almost half of first-time buyers believe they need 20 percent or more of a home’s price for a down payment, which may be why just 21 percent think they can currently make one.

“Some prospective first-time homebuyers tend to believe their personal circumstances should line up perfectly, or that they need a 20 percent down payment. Yet there are many ways homebuyers can achieve responsible and sustainable homeownership much sooner than they think,” said Boland.

Experienced buyers say value of homeownership goes beyond dollars and cents

Just one-third of owners say a home’s value is determined by how much it cost to purchase. Beyond financial value, current homeowners also see clear emotional benefits of homeownership, as nearly all say they are proud of owning (95 percent) and treasure the memories they have made (91 percent). Only 21 percent say owning a home is a burden.

Furthermore, the majority (82 percent) of experienced buyers look for ways to make their current home more valuable, and 70 percent spend a lot of free time working on their home.

For additional information about the Bank of America Homebuyer Insights Report, visit www.bankofamerica.com. For information on home financing, visit www.bankofamerica.com.

Bank of America Consumer Lending

Bank of America’s Consumer Lending unit includes First Mortgage, Home Equity, Merrill Lynch Banking, and Consumer Vehicle Lending. Each business is focused on delivering a distinctive and consistent client experience through competitive product offerings, quality loan production, choice of multiple connection and delivery methods, and operational excellence based on a client’s unique attributes and relationship with us.

About the Bank of America Homebuyer Insights Report

This survey was conducted by GfK Public Communications and Social Science, using GfK’s KnowledgePanel®, which yields results that are statistically representative and projectable to the American population. The survey was conducted online January 24–February 2, 2017. A total of 4,906 adults age 18+ were surveyed, including 1,268 current homeowners and 435 prospective homeowners. In addition, an augment was conducted to achieve 300 adults in 10 local markets: Boston, Charlotte, Chicago, Dallas, Denver, Houston, Phoenix, Miami, St. Louis, and New York. The margin of sampling error for national data is +/- 3.0 percentage points.

Bank of America

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 46 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 15,900 ATMs, and award-winning online banking with approximately 34 million active accounts and nearly 22 million mobile active users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Contacts

Reporters May Contact:

Terry Francisco
(213) 345-9024
terry.h.francisco@bankofamerica.com

Kris Yamamoto
(805) 526-1910
kris.yamamoto@bankofamerica.com

U.S. Homeowners Give Record High Satisfaction Scores To Their Insurers

New York, NY – March 13, 2017 (PRNewswire-USNewswire) About one of every 15 U.S. homeowners insurance policyholders files a claim each year and these claimants are now giving insurers their highest ever satisfaction ratings, according to the Insurance Information Institute (I.I.I.).

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The J.D. Power 2017 U.S. Property Claims Satisfaction Study gives U.S. home insurers a record score of 859 (on a 1,000-point scale). The industry’s cumulative score stood at 846 in 2016. Five factors are considered when assessing policyholder satisfaction: settlement; first notice of loss; estimation process; service interaction; and repair process.

“Insurers are the nation’s economic first responders and, as such, are continually working to improve how they help Americans recover their lives and businesses in the wake of tragedy and catastrophe,” said Sean Kevelighan, president and chief executive officer (CEO) of the Insurance Information Institute (I.I.I.). “This year’s J.D. Power and Associates survey results are a clear reflection that the industry’s hard work and dedication are delivering the intended results.”

These all-time high claims satisfaction scores are even more remarkable given that incurred losses and loss-adjustment expenses for U.S. property/casualty (P/C) insurers grew by 7.6 percent year-over-year when comparing the first nine months of 2016 to the first nine months of 2015, according to an analysis developed by Dr. Steven Weisbart, the I.I.I.’s chief economist.

Incurred losses reflect the dollar amount of a home insurer’s claim payout whereas a loss adjustment expense is the sum an insurer pays for investigating and settling claims, including the cost of defending a lawsuit in court.

Moreover, Dr. Weisbart noted, catastrophe-related claims through the first nine months of 2016 were already at their highest level since 2012—the year of Superstorm Sandy—and the fourth quarter of 2016 pushed those numbers even higher after insured claim payouts from October 2016’s Hurricane Matthew.

The federal government agreed that 2016 was a volatile, and costly one, estimating 15 separate weather and climate events last year caused more than $1 billion in economic losses, not all of them insured, according to the National Oceanic and Atmospheric Administration (NOAA).

“Property and casualty insurers have redoubled their efforts to improve the settlement process and fine-tune their customer interactions, efforts that have been clearly recognized and appreciated by homeowners who experienced significant losses this past year,” J.D. Power said.

The study also noted opportunities for improvement, most notably in water-related and other complex claims that take a long time to settle and that cause significant lifestyle disruption. J.D. Power noted, “Insurers that manage to get the settlement process and customer interaction equation right in these types of disruptive and often catastrophic scenarios are those that raise the bar for the industry.”

The study is based on more than 6,600 responses from homeowner’s insurance customers, and was fielded between January and November 2016.

The I.I.I. has a full library of educational videos on its YouTube Channel. Information about I.I.I. mobile apps can be found here.

THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.

Insurance Information Institute,
110 William Street,
New York, NY 10038
(212) 346-5500
www.iii.org

Homeowners Seeking Both a High-Tech and Human-Touch Mortgage Experience, Ellie Mae 2017 Borrower Insights Survey Finds

Survey of Homeowners and Renters Reveals Preferences Among Millennials, Gen Xers and Baby Boomers; Showcases Differences Between Male and Female Borrowers

Las Vegas, NV – March 8th, 2017 (BUSINESS WIRE) Fifty-seven percent of homeowners applied for and completed their latest mortgage completely in person, while more than one-quarter of homeowners (28 percent) applied for their most recent mortgage using a combination of online and in-person interaction, according to the 2017 Borrower Insights Survey of homeowners and renters conducted by mortgage automation provider Ellie Mae® (NYSE: ELLI). Another 11 percent of homeowners applied for their latest mortgage completely online with no in-person interaction. The survey findings were announced today at the annual Ellie Mae Experience conference.

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When asked what factor would have improved the mortgage process, approximately 40 percent of homeowners indicated they would have liked a faster process with fewer delays. Twenty percent indicated that a shorter, easier to understand application would be preferable, while 11 percent asked for more communication with their lender throughout the process.

Millennials were the most likely generation of homebuyers to begin their mortgage application online and finish it with an in-person interaction with their lender (30 percent). Gen X (28 percent) and Baby Boomer (20 percent) borrowers weren’t far behind in using this online and in-person approach.

“There’s no question that technology is playing a larger role in the home buying experience,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “As we expected, many homeowners are seeking a faster and more streamlined experience. And it’s not just a millennial phenomenon; it’s homebuyers of all ages and both genders.”

“But what’s even more telling is that homeowners still want a personal interaction with their lender. They want someone who can answer important questions, and make them feel confident that everything will be handled correctly and on time. While 27 percent of millennials identified the speed of the process as the top area to improve their experience, surprisingly 23 percent cited more face-to-face interaction as the second-greatest opportunity for improvement. By leveraging technology, lenders can provide a more high tech experience to simplify and speed the overall process, while still having the high-touch interactions when and where homebuyers want,” Tyrrell said.

The Ellie Mae survey found that today’s homebuyers most value speed, security and simplicity when applying for a home loan – all of which are enabled by technology. Millennials and women were the most likely to cite security as the most important factor when they applied for a loan. Gen X and Baby Boomer buyers were more likely to value the speed of the process. All three generations equally valued simplicity.

What One Factor Was Most Important To You When Applying For A Loan Online?

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Ellie Mae’s study also revealed that, despite the abundance of online marketing by lenders, referrals remain the predominant method consumers use to select a mortgage lender. Sixty-one percent of respondents chose their last lender based on a referral from a friend or family member (23 percent), bank (17 percent), realtor (16 percent), or financial advisor (5 percent). Online search was used by 18 percent of the survey respondents. Looking at behaviors across generations, 25 percent of millennials said they selected their mortgage lender based on an online search.

More data from the Ellie Mae 2017 Borrower Insights Survey are available online at www.elliemae.com/borrower-insights.

Methodology

Ellie Mae surveyed 3,099 individuals between the ages of 18 and 70 using the Qualtrics Insight Platform and a panel of homeowners and renters provided by Qualtrics panel services. The survey was fielded from December 21 – 30, 2016.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE: ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Contacts

Ellie Mae, Inc.
Erica Harvill
(925) 227-5913
Erica.harvill@elliemae.com

or

Allison+Partners
Alexandra Gardell Kreuter
(646) 428-0618
EllieMae@allisonpr.com