Though the average appraisal of a home still lags behind the price homeowners hope to achieve, the gap between the two numbers is narrowing, according to the National Quicken Loans Home Price Perception Index (HPPI).

The index compares the estimate supplied by homeowners on a refinance mortgage application to the appraisal later conducted in the mortgage process.

In December, appraisals were 0.5% lower than homeowner estimates on average, for the seventh consecutive month of narrowing between the two. This compared with November, where appraised values were 0.67% lower than homeowner estimates, and marks a major improvement from a year ago,when the difference was 1.33%. The Midwest region of the U.S. had the greatest gap between appraiser value and homeowner perceptions, with appraiser value lower than the perception by 0.71%.

“The housing markets that are rising quickly, like those in the West, are having appraisal values increasing above owner estimates because owners don’t realize just how quickly those markets are advancing,” Bill Banfield, Quicken Loans executive vice president of capital markets, said in a statement announcing the results.

The Dallas market had the highest difference between appraiser value and homeowner value, favoring homeowners; appraiser values were 3.17% higher than homeowner perceptions of value, according to the HPPI. On the other end of the scale was Cleveland, Ohio, where appraiser value was lower than homeowner perceptions of value by 2.09%.

Appraisal quality played a key role in a recent study of Home Equity Conversion Mortgages (HECMs) and their effect on home-price appreciation, with a marked increase in appraisal quality beginning in 2009 correlating with better performance among HECM properties.

Quicken Loans, which is based in Detroit, is the second-largest retail home mortgage leader in the U.S; the company originates reverse mortgages under the One Reverse Mortgage brand.

Written by Maggie Flynn