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New Federal Data Shows the Home Appraisal Gap Is Getting Worse

The Federal Housing Finance Agency’s first-ever release of data on home appraisals confirms that home values in white neighborhoods have risen more than those in communities of color.

U.S. Vice President Kamala Harris speaks about the Property Appraisal and Valuation Equity (PAVE) report in Washington, DC, on March 23, 2022. The PAVE task force released an action plan that represents wide-ranging sets of reforms to advance equity in the home appraisal process.

U.S. Vice President Kamala Harris speaks about the Property Appraisal and Valuation Equity (PAVE) report in Washington, DC, on March 23, 2022. The PAVE task force released an action plan that represents wide-ranging sets of reforms to advance equity in the home appraisal process.

Photographer: Samuel Corum/Bloomberg

A Black family looking to sell their home has it appraised.  The homeowners then remove all family and friends photos and has a white friend pretend to be the owner. A second appraisal values the house for thousands of dollars more than the original assessment.

This kind of racial bias in the housing appraisal profession has become so frequent it has become more commonly known as the appraisal gap. But it was just on Oct. 24 that the public became able to check for this discrimination themselves. On that date, the Federal Housing Finance Agency (FHFA) released a first-of-its-kind file, the Uniform Appraisal Data Set, which offers the most comprehensive look at industry practices yet seen. 

An analysis of that data by two experts in the field shows that not only does the appraisal gap exist, it has gotten worse over the past decade, with a particular acceleration during the Covid-19 pandemic. In a report released Wednesday, sociologists Junia Howell and Elizabeth Korver-Glenn found that while home values shot up across the US during the pandemic, they haven’t increased equally. Since 2020, the value of homes in predominantly white neighborhoods increased on average by $136,000, while comparable homes in non-white communities only appreciated on average by $60,000.