Home values still growing, but not as fast as owners think

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While home price appreciation showed steady growth in January, it's a lower rate than years past and consumer appraisal perception lags reality, according to Quicken Loans.

The Home Value Index — based on data from home purchases and mortgage refinances — grew 5.35% year-over-year and edged up 0.65% from December 2018.

"While there have been some recent movements in the pace of home appreciation, the housing market is still very strong and is making positive movements across the county," Bill Banfield, executive vice president of capital markets at Quicken Loans, said in a press release.

"As homes in each market adjust for the rate of price appreciation, buyers and sellers may find that there is more to negotiate — and some potential complications — if the purchase price isn't supported by the appraised value. The appraised value will be derived from recent, proximate sales, and are the leading indicator for the direction of the local market," Banfield continued.

On a regional basis, the South led year-over-year home value increases by a wide margin, with a 6.84% jump. The Northeast followed at 4.74%, the Midwest was next at 4.42% and the West rounded out the regions with 3.27%. The South also had the biggest month-over-month increase with a 1.34% value gain.

Appraisal values averaged 0.47% lower than homeowners' estimates in January, according to Quicken's latest Home Price Perception Index. It marked the 11th-consecutive month with a difference of less than half a percent, but the gap widened for the third month in a row.

The sentiment that home prices are slowing drives the growing discrepancy in appraisals.

"It looks like the HPPI is seeing the start of a downward trend, in lock-step with pockets of moderating home values," said Banfield. "However, with the national measure still reporting appraisals less than half of a percent lower than expected and with home values in the lowest performing metro area less than 2% lower than what homeowners estimated, the housing markets is still in a healthy place."

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Home prices Appraisals Housing market Housing affordability Purchase Quicken Loans