Stop Racism in Real Estate Appraisals

Racism in real estate appraisals is a serious issue that has had a significant impact on homeowners of color. A 2018 study by the Brookings Institution found that black and Hispanic homeowners were more likely to have their homes undervalued by appraisers than white homeowners. This undervaluation can have a number of negative consequences, including making it more difficult for homeowners of color to sell their homes, refinance their mortgages, and obtain home equity loans.

There are a number of things that can be done to stop racism in real estate appraisals. One important step is to increase diversity in the appraisal profession. According to the National Association of Realtors, only 5% of appraisers are black and 3% are Hispanic. By increasing the number of appraisers of color, we can help to ensure that appraisals are more fair and accurate.

Another important step is to address the unconscious biases that can lead to racism in appraisals. Appraisers are trained to be objective, but everyone has unconscious biases. These biases can be influenced by a variety of factors, including race, ethnicity, gender, and socioeconomic status. Appraisers can learn to identify and mitigate their unconscious biases through training and education.

Finally, it is important to hold appraisers accountable for their work. If you believe that your home has been undervalued by an appraiser, you can file a complaint with your state's appraisal board. You can also contact the Fair Housing Administration to learn more about your rights.

Here are some additional steps that can be taken to address racism in real estate appraisals:

Require appraisers to complete training on unconscious bias and fair housing laws.

Increase transparency in the appraisal process by making appraisal reports available to homeowners.

Develop algorithms to detect and flag potential bias in appraisals.

Create a fund to help homeowners of color challenge inaccurate appraisals.

Support legislation that would prohibit discrimination in appraisals.

By taking these steps, we can help to ensure that all homeowners have the opportunity to build wealth and equity through homeownership.

Let's Act Now to Stop Racism in Real Estate Appraisals: How can lenders like community development financial institutions, or CDFIs, fight bias in the appraisal industry?