Home value gains slow to lowest rate in past year

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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."

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Home prices Appraisals Housing market Purchase Housing affordability Mortgage rates Quicken Loans