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Groups attacking racial bias in home appraisal process by recruiting more diverse appraisers

Home appraisal process
Posted at 10:28 AM, Oct 08, 2021
and last updated 2021-10-11 14:30:51-04

Racial bias in the home appraisal process continues to be an issue.

A recent analysis from Freddie Mac shows that only 7.4% of appraisals in a majority white neighborhoods came in below the property's contract price, compared to 12.5% in majority Black areas and 15.4% in majority Latino areas.

Researchers say homeowners of color were still more likely to see lower appraisals even after accounting for structural differences in homes or unique neighborhood characteristics.

One part of addressing the inequity is increasing diversity among home appraisers — something that Freddie Mac, Fannie Mae, the Appraisal Institute and the National Urban League are all working on together.

"A lot has to do with social capital, right? Who knows appraisers and those people who know appraisers are kind of brought into the industry," said Cy Richardson of the National Urban League.

The most recent numbers on appraisers nationwide show that 85% of them are white. They're also overwhelmingly men over the age of 50.

Richardson says the National Urban League's housing and community development efforts are trying to open up the appraiser career path to a more diverse community.

"There's a kind of financial barrier and disparate impact," Richardson said. "There's a kind of time commitment in terms of the supervisory and the kind of an apprenticeship aspect of the career."

Scholarships are one way the Appraiser Diversity Initiative addresses the financial barrier. The group handed out their first scholarships this year.

The Appraiser Diversity Initiative also has information about workshops to find out how to become an appraiser. Click here to visit the group's website.

The group's president says they are also addressing unconscious bias in the industry by reinforcing ethics, education and training.