The value of property continues to be estimated unfairly for Black homeowners compared to their white counterparts.
MarketWatch reported that a new test conducted in Baltimore by the National Community Reinvestment Coalition (NCRC) shows the appraisal differences between Black and white homeowners through the use of mystery shoppers.
Part of the study examined an interracial couple who was assigned different appraisal values based on the
skin color of each partner. When the white partner met the appraiser for a single row house, the quote was $350,000. However, the Black partner in the relationship was quoted $310,000 by a separate appraiser. According to the NCRC, both appraisers were randomly selected, and the inspections were set on different days that were close together.“The discrimination we found in the appraisals system undermines Black wealth-building and almost certainly violates the law,” NCRC President and CEO Jesse Van Tol
said in a statement.“It is unacceptable for appraisers to undercut the value of homes and conduct themselves less professionally when dealing with Black homeowners.”
A recent lawsuit from a couple in Baltimore alleges that their home appraisal went from $472,000 to $750,000 after they allowed a white male colleague to stand in for them as a second appraisal was conducted.
“The discrimination NCRC’s testers experienced can have devastating effects to a family’s long-term wealth-building efforts–and not just by depressing a home’s monetary value,” the NCRC website explains.
“The delays and discourteous non-communication some appraisers in NCRC’s testing displayed toward Black testers can also cause sellers to miss out on cheap interest rates, or even derail a sale entirely.”
An 84-page report provided by the National Fair Housing Alliance (NFHA) revealed that the value of Black neighborhoods was reduced as a result of discriminatory associations between race and risk.
“Because home value has been the cornerstone of intergenerational wealth in the United States, the historical appraisal practices have had long-term effects in creating some of the current wealth inequalities where white wealth has soared while Black wealth has remained stagnant,” according to the report.
Other cases in the NCRC’s examination included a situation where the appraiser reportedly ghosted the Black homeowner, never sending a report, and another instance where a Black partner in an interracial relationship was asked to pay upfront.