Commentary | End American Horror Stories by Eliminating Appraisal Bias – By Charu Singh (US News) / July 25, 2022
It’s time to fix a system that’s often rigged against homeowners of color.
Lawmakers and policy advocates have been closely examining the barriers to homeownership for many, particularly in light of National Homeownership Month this past June. It’s crucial that any examination must include a focus on structural barriers faced by Americans of color – including home appraisal bias, undervaluation and barriers to wealth generation.
For people of color, the home valuation process has long been fraught with the shadow of perceived but unproven prejudice. Recent reports from The Washington Post, NPR and other outlets highlight horror stories of appraisers undervaluing Black-owned homes, and have shown the rest of America the shocking measures Black families have had to take to counter bias. Yet as heartbreaking as these personal stories are, they don’t come close to exposing the true dimensions of inequity within the valuation and lending industries.
Digging a little deeper to understand the full impact of appraisal bias reveals numbers that tell a powerful story. A Brookings Institution report using data from 2012 to 2016, for example, found that homes in neighborhoods defined as majority-Black were on average undervalued by nearly $50,000, resulting in $156 billion in total lost value.
