A Federal Housing Finance Agency study of 47M appraisals found that comparable homes in white areas appraised as much as twice as high as homes in Black areas.
WASHINGTON – A Federal Housing Finance Agency report analyzing 47 million appraisal reports completed between 2013 and the second quarter of 2022 found that houses with comparable amenities in mostly white neighborhoods were assessed at double the value of houses in minority communities.
The pandemic seemed to exacerbate the racial inequities, with average house values in white neighborhoods rising by $136,000 compared to just $60,000 in minority communities, FHFA claims.
In the last 10 years, the house-value gap increased by 75%. The report also found that the racial gap was threefold higher in metro areas with the largest house price inflation rates.
“Racial inequality in home values directly contributes to persistent racial wealth gaps and residential segregation, which in turn influences racial inequalities in health, income and educational outcomes,” according to the report. “Home value inequalities are the result of appraisal practices that elevate white spaces as the most valuable.”
FHFA also cited other studies that confirm an appraisal bias between minority neighborhoods and white neighborhoods:
“The gap in undervaluation is notable, and the new datasets may be helpful in better understanding the disparities,” FHFA said in its conclusion.
Source: CNN (11/03/22) Ellis, Nicquel Terry
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