Freddie Mac finds ‘pervasive’ bias in home appraisal industry

 

Source: Brentin Mock, Bloomberg

A study from the federal housing finance agency Freddie Mac adds to a growing body of research that finds racism in the appraisal industry is undervaluing the homes of Black and Latino Americans compared to white-owned homes. The new Freddie Mac study shows:

12.5% of appraisals in majority-Black census tracts came in below the contract price of the houses they assessed compared to 7.4% of appraisals in white tracts. For appraisals in majority-Latino tracts, 15.4% were valued lower than the contract price.

As for the idea that bias might only occur among a small number of appraisers, the study found when analyzing the appraisal reports of several thousand appraisers that the majority of them reported “statistically significant” racial gaps in their valuations.

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