The Wrap: Appraisals bounce back after holiday weekend but still down

HousingWire/a la mode partner on new weekly appraisal metric feature

While the appraisal volume did bounce back from the holiday week last week, it fell short of a complete recovery and supports the view that the overall trend is slightly downward.

HousingWire is partnering with a la mode, inc., an appraisal forms software company which has since 2006 tracked the appraisal volume throughout the country, to provide a weekly read on appraisal volume.

Appraisal volume is an indicator of the market strength and has a few advantages over mortgage applications, especially since fallout is less for appraisals since they are ordered later in the mortgage process after credit worthiness has been approved. 

a la mode captures 50% of the appraiser market – more than 6 million appraisals per year since 2007, making it the most comprehensive record of national appraisal. 

Here are the latest figures.































Earlier this week, Consumer Financial Protection Bureau Director Richard Cordray spoke to the Senate Banking Committee, saying the bureau is working to improve appraisals and accessibility of appraisals in rural markets.

Appraiser home value opinions fell further below homeowner estimates in June, marking the fifth consecutive month of this trend at the national level, according to Quicken Loans.

Appraiser opinions of home values were 1.4% lower than homeowner estimates, according to Quicken Loans’ monthly national Home Price Perception Index. 

Quicken Loans’ national Home Value Index reported a slight increase of 0.74% in June, with home values increasing in all regions of the country except for the South, which posted a decline of 0.09%. National home values are up 4.38% from the year prior.

Click to enlarge

(Source: Quicken Loans)

June marks the fifth consecutive month appraisers have estimated home values below homeowner estimates. During this five-month period, the gap between homeowner and appraiser estimates has increased each month, with an average 1.4% difference in June. 

“Over the last five months we’ve seen homeowners continually value their homes higher than appraisers,” said Bob Walters, Quicken Loans chief economist. “While each local market has a different story to tell, a large part of this perception gap is likely due to the normalization of home prices. After about a year of home values trending upward, it takes some time for many homeowners to realize home values are stabilizing in their neighborhoods.”

American Banker points to the growing problem that there’s an increasing shortage of appraisers — especially if home sales continue to grow.

With older appraisers retiring and fewer and fewer college graduates entering the profession, industry observers say that, in five to 10 years, there won't be enough appraisers to handle the volume of home sales. For lenders, that could mean higher appraisal fees and long delays in closing loans — at a time when technology could be speeding up the process.

Valued Veterans, a nationwide appraisal management company, has implemented Platinum Data’s RealView appraisal quality technology. RealView provides Valued Veterans with scalability, the company says, which allows it to grow without restriction.

Valued Veterans is the only national appraisal management company recognized by the U.S. federal government as a service disabled veteran-owned small business. It has grown from one employee to 25 staff members in several locations in the past three years.

The company’s growth plans include targeting companies that want to increase their diversity spending with disabled veteran-owned businesses, and increasing its pool of qualified appraisers by training and mentoring military veterans as appraisers.

“It was a simple equation – the number of qualified appraisers is sharply declining, and there are a lot of veterans looking for work with a strong career path. This is a win-win program,” Valued Veterans CEO Andrew Belt said in a release. “There’s nothing standing in the way of our growth. Our membership program for veterans is an effort to bring new appraisers into the field and RealView’s scalability enables us to grow without limitations.”

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