For years, Black homeowners told stories about low appraisals that went up after they took family photos off the walls. Researchers have now measured the pattern across millions of home sales. Here is what the biggest studies found.
1. Homes in Black neighborhoods are worth less than they should be
In 2018, researchers at the Brookings Institution compared homes in majority-Black neighborhoods with similar homes in neighborhoods with few or no Black residents. After accounting for the home, the neighborhood, and local amenities, homes in majority-Black neighborhoods were still valued about $48,000 less on average. Across the country, that adds up to about $156 billion in lost value.
Brookings described appraisals as "one link in the chain of devaluation." Lending, insurance, and decades of segregation all play a part, but the appraisal is the moment a number gets written down.
2. Appraisals come in low more often in Black and Latino neighborhoods
In 2021, Freddie Mac studied about 12 million purchase appraisals from 2015 to 2020. It looked at how often the appraisal came in below the price the buyer and seller had agreed on. That's the clearest sign of a low appraisal, because the contract price shows what a real buyer was willing to pay.
- 7.4% of appraisals in majority-white census tracts came in below contract.
- 12.5% came in below contract in majority-Black tracts.
- About 15% came in below contract in majority-Latino tracts.
The gap grew as the share of Black or Latino residents in a neighborhood went up, even when Freddie Mac compared similar homes.
3. The pattern held up from 2019 to 2023
The Federal Housing Finance Agency publishes appraisal statistics from the Uniform Appraisal Dataset, which covers purchase appraisals on loans sold to Fannie Mae and Freddie Mac. Home Equalizer analyzed the 2019–2023 data, about 14.3 million appraisals. Homes in majority-Black neighborhoods were appraised below the sale price 15.2% of the time, compared with 9.8% in majority-white neighborhoods. That is 56% more often.
You can look up your own state, county, and neighborhood in the Appraisal Gap Check.
4. One family's story made it real
In Marin City, California, Paul Austin and Tenisha Tate-Austin had their home appraised at $995,000. They asked a white friend to stand in as the owner and removed signs that a Black family lived there. A second appraiser valued the same home at $1,482,500. The couple sued the first appraiser and settled in 2023. The appraiser did not admit liability but agreed to fair housing training.
What's being done
- In 2021, Fannie Mae scanned 14 million appraisals for prohibited language and began sending feedback letters to appraisers with repeated problems.
- In 2022, a federal task force (PAVE) released an action plan to make it easier to ask for a second look at a low appraisal and to add fairness standards to automated valuations.
- Since August 2024, Fannie Mae and Freddie Mac require lenders to have a clear process for homeowners to request a reconsideration of value. Read how to challenge a low appraisal.
What this means for you
A low appraisal isn't always bias. Sometimes the market is cooling or the home needs work. But you have the right to see the appraisal, check the comparable sales, and ask for a second look. Home Equalizer's free value check shows the nearby sales that best match your home, using the same radius rule for every homeowner.