U.S. plan aims to end racial, ethnic bias in home appraisals

Vice President Kamala Harris announced a plan today intended to end racial and ethnic discrimination in the appraisal of home values, part of a broader federal effort to address a wealth gap that systemic inequality has perpetuated.

The plan contains 21 steps to improve oversight and accountability, including a legislative proposal to modernize the governance structure of the appraisal industry. Appraisers help to determine the value of a home so that buyers can receive a mortgage.

“Black and Latino people often have to pay more for their mortgage, receive less when they sell the home and are less able to access home equity lines of credit,” Harris said at the White House. “Our administration will continue to fight to ensure that all homeowners and homebuyers in our nation are treated fairly.”

Multiple reports, including a September analysis by mortgage buyer Freddie Mac, show that appraisers are more likely to undervalue homes in Black and Hispanic neighborhoods. This form of discrimination widens the racial wealth gap and makes it harder for many Americans from disadvantaged backgrounds to move up the economic ladder.

One Black homeowner in Indianapolis found the appraised value of her home went from $125,000 to $259,000 after she declined to state her race in her application and removed all family photos and African American art in the home.

As part of the action plan, the government will expand the complaint hotline for the Department of Housing and Urban Development and the Consumer Financial Protection Bureau. There also will be appraisal bias training in homebuyer education classes and efforts to ensure that the computer systems used to value homes do not perpetuate racial biases.