Home prices keep rising, but improved affordability is coming: Quicken

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While September had a steady yearly rise in home prices, the month-to-month growth is slowing down, according to Quicken Loans.

Year-over-year, the Home Value Index — based on data from home purchases and mortgage refinances — rose 5.69%. However, the index only grew 0.35% in September from August, a slowdown that could be signaling things to come.

"Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up," Bill Banfield, executive vice president of capital markets at Quicken Loans, said in a press release.

"While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation."

On a regional basis, home values increased 7.06% in the South, 6.36% in the West, 4.22% in the Northeast and 3.97% in the Midwest year-over-year. Month-over-month changes were much more tempered, with the Northeast leading at 1.33% and the West dipping into the negatives at 0.56%.

Appraisal values were on average 0.29% lower than homeowners' original estimates in September, according to Quicken's latest Home Price Perception Index. The perception in value is much closer than a year ago, when the HPPI stood 1.14% lower.

"A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether," said Banfield. "All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process. Our hope is that the HPPI data on past neighbor transactions can help a homeowner better estimate the value of their home in order to set their financing up for success."

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Home prices Appraisals Housing market Purchase Quicken Loans