Biased appraisals and the devaluation of housing in Black neighborhoods

In September 2021, Freddie Mac released a groundbreaking analysis of the U.S. home appraisal industry. Consistent with concerns raised by critics, they found that homes in Black and Latino or Hispanic neighborhoods are much more likely than homes in white neighborhoods to be valued below what a buyer has offered to pay.

This research brief examines these findings in the context of our own studies on the devaluation of housing in Black neighborhoods and the wider literature. First, we summarize our research and discuss objections to the interpretation of our findings raised by critics and why these objections do not hold up to scrutiny. Next, we introduce and summarize the new research on appraisals and then situate those findings in the larger literature on discrimination in housing markets. We conclude with the issues we hope to see explored in future research.