The most recent study by Quicken Loans Inc. of homeowner value perceptions revealed that the disparity between appraiser and homeowner opinions of home values widened in February for the first time in six months.
While home values have generally increased since 2011, homeowners’ perceptions of home values have become inflated relative to appraiser valuations in the past year or so.
Homeowners’ Price Perception
In the study, the difference between homeowner estimates of home worth and appraiser valuations was measured using Quicken Loans’ Home Price Perception Index (HPPI). The HPPI was determined by comparing the difference between the homeowner’s estimated home value as listed on the mortgage application with the appraised value of the home.
Historically, homeowners tend to over-estimate the values of their homes. However, the HPPI indicates that appraisals, on average, consistently exceeded homeowners’ estimates throughout the second half of 2013 and most of 2014. Since late 2014, homeowners’ estimates of home values have once again consistently exceeded appraiser estimates. In February, homeowners over-estimated the value of their homes by only about 2.0 percent.
Appraisers’ Valuation
The Quicken Loans study also compared…
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