Homeowners feel better about their homes than they should, as appraisers are placing home values below what homeowners think they should be, according to a report by Quicken Loans, a retail mortgage lender.

Home values assigned by appraisers were 1.93% lower than what homeowners estimated in June, according to the report. This shows a widening gap from May, where home values were 1.89% higher than homeowners thought.

“Perception is everything. It can make or break a home sale or mortgage refinance,” Quicken Loans Chief Economist Bob Walters said. “That’s why it’s so important for homeowners to realize how they perceive their home’s value could vary widely from how an appraiser views it.”

“If the estimate is lower by just a few percentage points, the buyer could need to bring as much as another several thousand dollars to the table to avoid having to restructure the loan,” Walters said.

The company’s report combines the Home Price Perception Index with the Home Value Index.

This gap between homeowner perception and appraised values exists despite the increase in the average home appraisals by 0.84% since May, and an increase of 4.47% since June last year.

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Quicken Loans

(Source: Quicken Loans)

“Nationally, home value increases are well within the healthy range,” Walters said. “Although, the variances across the country can influence owners’ perception.”

“Owners in the West, where appraised values are rising more quickly, tend to underestimate their home’s value,” he said. “The opposite is true for those in the Northeast, with appraised values showing slower growth.”