• Nationally, home values are 1.95 percent less than what homeowners think they are.
  • Denver, Colorado has the highest Home Price Perception Index, with reaching over 3 percent higher than homeowners' expected value.
  • Detroit has the lowest HPPI on the graph, dropping below 3 percent. Philadelphia has lowest HPPI of all the cities examined.

According to Quicken Loans’ Home Price Perception Index (HPPI) for April 2016, national home appraisals are 2 percent lower than homeowners’ expected value. This unprecedented report shows how homeowners are viewing the housing market verses the reality of the housing market.

Upon first glance, the noticeable difference is in the way homeowners value their homes in the major markets on the West and East coasts. Los Angeles and San Francisco residents saw their homes valued higher than expected, while Washington, D.C., New York City, Miami and Chicago overvalued their homes against appraisers values.

Quicken Loans HPPI

Quicken Loans HPPI

On the a national level, the appraised value of homes was 1.95 percent lower than March homeowners’ expectations. And although there are have been slight fluctuations, the HPPI has teetered around -2 percent within the past year.

With only slight changes month-over-month, the common trend is that homeowners on the West Coast are undervaluing their homes while the midwestern and eastern metros are overestimating their home’s value.

“The HPPI is in a healthy trend, nationally,” Quicken Loans Chief Economist Bob Walters said. “While everyone wants their appraisal’s to come back showing more equity than anticipated, like some homeowners in the West, the discrepancy we are seeing now won’t likely derail a mortgage transaction.”

HPPI_quickenloans_2

According to the Quicken Loans Home Value Index (HVI), national home values dipped 0.66 percent from March to April. However, if you look at the year-over-year numbers, there has been a 3.79 percent increase in home values.

The West was the only region with a decrease in home values. Home values in that region dropped 1.72 percent month-over-month. Regardless, that same region has seen the most growth of any other with year-over-year increase of 4.86 percent.

The way Quicken Loans determines HPPI is by comparing the value the homeowner supplies on a refinance mortgage against the appraisal value determined later in the mortgage process.

Email Britt Chester

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