Home values jump
If you already own a home, then you’re in luck. According to a new study, home values made their biggest climb in five years last month.
Home values are on the rise
A new study from Quicken Loans shows that home values are on the rise. In September, they notched their highest monthly climb in five years, increasing 2.15 percent on average. Over the year, property values jumped 6.52 percent.
Home values rose in all regions of the country, with the biggest annual increase in the Midwest (+6.34 percent). The West saw the second-biggest jump at 5.51 percent.
According to Bill Banfield, executive vice president of capital markets at Quicken Loans, the growing values prove “homebuyer interest is not falling with the leaves.”
“Despite the start of the school year and the introduction of cooler temperatures in parts of the country, home shoppers are still active,” Banfield said. “Buyer interest, combined with persistently low home inventory, continues to drag up home values.”
New homes see price decline, though inventory remains low
Estimating property values
The same study also shows that homeowners are getting better at estimating their property’s true value. In fact, the average appraised value was just 0.49 percent lower than homeowner expectations last month — a closer margin than we’ve seen most of this year.
What is an appraisal and why do I need one?
According to Banfield, that’s good news for both buyers and refinancers — as understanding property values before starting the mortgage process is key.
“Underestimating your home value could, understandably, feel like a windfall,” Banfield said. “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.”
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