First, each bank and each appraisal may differ by 5%. Now for your question. Assessed value is determined by the county or city in which your home is located. Many times, they will determine the value once per year. Many times they will put many homes into a "bucket" and find the value based on all of the other homes in your market area. Some of these homed may not be similar to your home. Sometimes, they will get more specific. Assessed values will usually follow market values appraised by an appraiser. That is if home values are increasing, the market value (value by the appraiser) will be more than the assessed value. When values are declining, market value will be less than the assessed value. The market value is much more accurate, but many times the assessed value and the market value will depend on the county. Some counties are spot on and some are way off.