Homeowners are getting better at valuing their homes, according to Quicken Loans.
The National Home Price Perception Index (HPPI) showed that the average home appraisal was 0.49% lower than what homeowners were expecting in September. This gap shrank from 0.64% in August.
“Underestimating your home value could, understandably, feel like a windfall,” said Bill Banfield, executive vice president of capital markets at Quicken Loans. “But if a homeowner overestimates their home value, the mortgage could need to be reworked when refinancing – possibly even requiring the owner to bring more cash to the closing table.”
In 55% of the major metro areas analyzed, the average appraisal was higher than anticipated. Meanwhile, the gap in all metros with the average appraisal lower than the homeowners’ estimate was less than 2%.
Homeowners in Boston and Charlotte underestimated their value the most, with average appraisals 1.71% and 1.61% higher than their estimates. Meanwhile, owners in Chicago tend to overestimate their homes’ value by 1.67%.
Home values also jumped 6.5% year over year and 2.15% month over month, according to the Quicken Loans Home Value Index (HVI). The spike marked the largest monthly gain in over five years.
“The clear news from the HPPI data is that homebuyer interest is not falling with the leaves,” Banfield said. “Despite the start of the school year, and the introduction of cooler temperatures in parts of the country, home shoppers are still active. Buyer interest, combined with persistently low home inventory, continues to drag up home values. With August’s jump in homebuilding at its highest level in 12 years, there could be some hope on [the]horizon for home shoppers who haven’t been able to find a home that is a perfect fit at the right price.”