Just last year, we wrote about a Black family's discovery that their out-of-whack home appraisal could only be explained by their race. The practice, it seems, of biased appraisals is so widespread that the White House has laid out a plan to combat it. As Axios reports, the Biden Administration believes lowering the barrier for appraisers getting into the industry will help diversify the field. They also plan to set up rules to limit algorithm-based bias and to make Federal Housing Administration data more available to spot racial-bias trends.
Vice president Kamala Harris said of the White House's moves, "Home appraisals are meant to be fair and objective estimates of the market value of a property. However, far too often they are not."
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Lower-than-fair home appraisals can make it hard to get refinancing loans, can lower the selling cost of a home, and can make it harder to get a home loan in general. Data suggests that Black and Latino homeowners are about 50 percent more likely to have their homes undervalued in appraisals. Yup, it's some systematic racism at play that the administration is hoping to address.
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The White House set up a task force last year to study the issue. Among one of the key findings: Only about 5 percent of appraisers in the U.S. are people of color, which makes the widespread racial-disparity issue in home appraisals a little less surprising once you know that fact.
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