Appraisers and homeowners are finally agreeing, according to Quicken Loans Home Price Perception Index. The index is used to evaluate perceptions of the real estate market.
So, what the heck does that mean to the homeowner? Well, that depends. First, homeowners haven’t understood how quickly their home has increased in value. Nation-wide there has been an increase in price of 6% year-over-year. Markets are different, of course, and some have seen a double-digit increase. Denver Metro is one of them.
Appraisers have been responding to the market increases and have actually been appraising homes higher than what a lot of homeowners were thinking. As a homeowner, you may decide that the time is right to sell since we don’t know how long this expansion will be or how long the interest rates are going to stay under 5%. If you paid attention to the latest news from the Federal Reserve, it looks like we may see increases in interest rates in mid-2015. A difference in a point in interest rates can mean a possible $20,000 difference in what a buyer can afford. That alone could erase a seller’s appreciation.
If you are not planning to sell your home but you are paying Private Mortgage Insurance (PMI), you should check with your lender and see if you are at a good Loan-to-Value Ratio, meaning you have at least 20% equity in your home now that your home is worth more. You can get rid of that pesky PMI monthly cost which can be $100 and more per month. You must have great credit scores.
This is a great time to own a home so take advantage of it. Like everything, real estate obeys the law of cycles. Make sure this one doesn’t pass you by.