At Reggora we take a data-driven approach to streamline the appraisal process for lenders and appraisers. This is why we’ve created the Appraisal Performance Index, a dynamic database complete with national averages and local performance metrics based on aggregated data from our appraisal management platform.
The index contains trending data on turn times, fees, and revision rates from lenders across the lower 48 states. In this post, we highlight 2022 national averages and trends for:
This article only includes a brief overview of the index. For a more fleshed-out presentation of the data, be sure to delve into our 2022 insights, where Brian Zitin and I also provide a bit more context around each of these data points.
It’s worth keeping in mind that the Appraisal Performance Index is granular down to the county level. Lenders interested in taking a personal tour of the dataset to see trends and averages in your geographic region or industry segment can request a private benchmarking meeting.
How the Index Benefits Lenders and Appraisers
We built the index to enable our partners to gain a broader understanding of one of the most critical processes of the home buying experience — the appraisal. This is where insight, benchmarking, and building a data-driven strategy will help support a true digital mortgage experience.
It’s noteworthy that these performance metrics previously weren’t readily available. The index includes both national trend data and local market insight critical to making informed decisions.
Local Market Insights for Lenders and Appraisers
The purpose of the index is to empower both appraisers and lenders. Appraisals tend to operate in a black box for lenders and their customers, devoid of standardized data that gives a true scope of the landscape.
Likewise, appraisers and appraisal vendors must understand how they compare to their locale.
Actionable Performance Benchmarking for Both Parties
To make the insight actionable, we’ve provided context for each performance metric. There must be a full understanding of how the turn time compares to others in the same service area. It needs to be understood whether slowdowns are due to issues in the hands of the appraiser or the lender. With a complete view of each stage of the appraisal process, the factors at play, and its context within the local market, both lenders and appraisers can have a true understanding of performance. It's important to note this data covers residential appraisers, not commercial (like this Massachusetts commercial real estate appraiser).
Building a Better Borrower Experience
In the end, everything done to streamline the appraisal process is ultimately in service of the borrower.
The message from the industry is clear that borrower experience is vital to winning in a purchase-driven market. Lenders and appraisers must work together to keep the process as easy and stress-free as possible for the borrower.
Highlights from the Data
Now that we’ve laid out why this level of insight is critical to lenders, let’s dive into some of the actual performance metrics that provide a snapshot of the 2022 market. Again, for more in-depth analysis of the performance data, charts that illustrate the below metrics, and our data methodology, click over to the 2022 insights report in our resource library.
Appraisal Fees Decreased Throughout 2022
The average final appraisal fee rose from $620 per order in January to $635 in March, falling to $592 by December. The average appraisal fee for 2022 was $614.
In addition to monthly averages, the index shows geographic trends as it relates to appraisal fees. We saw that coastal states skewed high while land-locked states all fell below the national average.
Fee Escalations Dipped In 2022
Fee escalations peaked at 9% of appraisal orders in April and cost $232 on average that month, also the high mark for 2022. The percentage of fee escalations in the month of December hit a year-low 3%.
Turn Times Dropped In 2022
After beginning the year longer than 8.0 business days per order, the average turn time dropped by nearly three days by the end of 2022.
Appraisal turn times started at 8.3 days per order in January, jumped to 8.7 days in March, and dropped to 5.6 days in December.
One of the benefits of Reggora’s appraisal management platform is the ability to measure the different segments of the appraisal process. Additionally, the Appraisal Performance Index contains data granular down to the county level, so if you are interested in digging into a specific area, please reach out to schedule some time with us.
Revision Requests Increased In 2022
Revision requests showed an inverse relationship with demand as revision rates steadily increased in 2022.
About 18% of orders included a revision request in January, climbing to 29% by November, the highest percentage of any month.
Expectations for Appraisal Performance in 2023
Given current interest rates and drops in volume, the performance measurements seen late in 2022 are expected to continue into 2023.
A personalized benchmarking session of the 2022 Appraisal Performance Index is available at reggora.com/index. Lenders can receive a full, customized report down to relevant zip codes and areas of service. Whether determining best service in an area or mapping out an expansion into new territory, it’s pertinent to be fully informed on appraisal performance in your targeted areas.
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