TN Tribune—Black families have about one penny of wealth for every dollar of their White counterparts. That’s the cold reality in communities across the country. One of the chief reasons is widespread bias throughout the real estate industry that clamps down the Black homeownership rate. Owning a home is key to Black wealth: studies say 60% to 70% of the average Black household’s net worth comes from home equity. But a compounding problem is the damage to wealth perpetuated by biased appraisals.

HUD’s Action Plan To Advance Property Appraisal And Valuation Equity:”Researchers have observed a market value gap between majority-Black and majority-white neighborhoods for decades. On average, homes in majority-Black neighborhoods are valued at less than half of those in neighborhoods with few or no Black residents. Statistical analyses show that accounting for neighborhood and property characteristics and amenities—such as the age of the property or its proximity to public transportation—does not explain the entire disparity. Recent research has identified appraisals as one of the drivers of the gap.”

These are the facts that lawmakers and regulators must consider when seeking to end appraisal bias in communities around the country

*A 2021 Redfin study found that homes in Black neighborhoods are undervalued by $46,000 on average, a gap that has been constant over the past decade.
*When an appraisal is disputed, the burden is on the real estate agent or lender to provide data supporting a change in the valuation. But that rarely happens – less than 3% of appraisals are ever revised
*The appraisal industry badly needs diversity. In a Quarter 1 2019 report, the Appraisal Institute presented data showing that 4.4 % of appraisers are Hispanic and only 1.3 Black.

*According to a study by the Brookings Institution, differences in home and neighborhood quality do not fully explain the devaluation of homes in Black neighborhoods. Homes of similar quality in neighborhoods with similar amenities are worth 23 percent less ($48,000 per home on average, amounting to $156 billion in cumulative losses) in majority Black neighborhoods, compared to those with very few or no Black residents.

*A 2021 Freddie Mac study examining appraisals for home purchases the GSEs received from 2015 to 2020 shows that appraisals in Black neighborhoods are more likely to fall short of the contracted price than those in White neighborhoods even when taking structural and neighborhood characteristics into consideration 

*Automated valuation modeled (AVMs) appraisals are increasingly used to limit potential racial bias in the process but could lead to systemic devaluation of black homes. Urban Institute researchers warn that AVM inaccuracy disproportionately affects majority-Black neighborhoods due to Blacks having lower home values on average ($169,855 in 2018, versus $424,810 in predominantly White neighborhoods.) They also tend to have older homes and different conditions than those of White neighborhoods.

NAREB annually releases a State of Housing in Black America (SHIBA) Report detailing the status of Black homeownership in the US. It identifies the barriers to homeownership frequently caused by structural racism. For more information visit: For more information visit: