Black Neighborhoods Persistently Get Low Appraisals: Freddie Mac Study


The racial gap in home appraisals is a real phenomenon, one that sabotages the wealth-building power of homeownership in Black and Latino neighborhoods, mortgage giant Freddie Mac said Monday.

The company released an analysis showing that appraised values are more likely to fall short of the contract price for homes in census tracts with a higher share of Black and Latino households. The conclusion was based on Freddie Mac’s examination of 12 million appraisals ordered for purchase transactions from 2015 to 2020.

The appraisal gap matters because it creates a barrier for Black and Latino consumers hoping to buy homes.

“This is a persistent problem that disproportionately impacts hundreds of thousands of Black and Latino applicants,” said Michael Bradley, Freddie Mac’s senior vice president of modeling, econometrics, data science and analytics.

A measurable racial gap

Freddie Mac’s study added data points to claims that appraisers might…

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