Home value gains slow to lowest rate in past year
The decelerating pace of home price growth in October is helping offset the rise in mortgage rates, according to Quicken Loans.
The Home Value Index — based on data from home purchases and mortgage refinances — rose 4.36% from October 2017, the lowest year-over-year increase of the past 12 months. Month-over-month — a measure with higher variation — the index dropped 0.55% from September.
"The pace of home price growth appears to be moderating and varies by region representing a healthy adjustment to strong price gains of the past," Bill Banfield, executive vice president of capital markets at Quicken Loans, said in a press release. "Slower gains in prices can balance out changes in interest rates affecting affordability for those looking to purchase a new home."
On a regional basis, year-over-year home value increases were led by 6.04% in the West and followed by 4.32% in the Midwest, 3.97% in the South and 2.59% in the Northeast.
An added benefit to the slowing home values is an increasing congruence in appraisals, which leads to smoother mortgage processes. Appraisal values were on average 0.28% lower than homeowners' estimates in October, according to Quicken's latest Home Price Perception Index. It's now the eighth-consecutive month where appraisal value disparity is less than half a percent.
"With homeowner estimates and appraiser opinions moving more closely together, mortgages are less likely to run into snags in the process," said Banfield. "With the combination of a better understanding of appraisal values, and continued home value increases, this could be a good time for homeowners to tap into their growing equity to pay off higher interest debt or make home improvements."