JANUARY 8, 2021 – The American Enterprise Institute has published a study about the possibility that appraisers have intentional or even unintentional racial bias. Their conclusion is:
We conclude allegation that knowing the race of the applicant results in racial bias by appraisers on refinance loans is uncommon and not systemic. This same analysis supports the conclusion that unintentional bias based on race is also uncommon and not systemic.
You can find the article and link to the report at:
It would be nice if the racially biased Brookings Institute would issue an apology to the appraisal industry. But, racists have an agenda and do not apologize. Thankfully, there is access to actual data and entities like the AEI can analyze and report the facts.
Basically, it is simply impossible for the appraisal industry to be racial or gender biased. Probably 99%+ of the time appraisers know nothing about the physical characteristics about the borrower in residential transactions. Also, every appraisal report is reviewed and I would say near 100% of the time the reviewers know nothing about the borrower at all.
AVMs are often used in the residential arena and they know nothing about the borrower nor the subject’s neighborhood, et al. To them, data is data. Finding the best comparables is based on analyzing numbers. That simple. And for the most part, it is the same for human appraisers.
There is one group of people in real estate that can have significant bias. I won’t name them. You can probably figure it out. There might actually be a few groups involved in this arena that can have bias. That is not to say it is widespread and rampant.
For those who want to keep the ‘conversation’ going, provide the AEI report. You will see how fast the other side wants to stop the conversation and change the subject:)
Great work AEI. I hope they will now do a study about the 20 million whites that live in poverty and see what it is about their neighborhoods that is common and how action can be taken to improve their standard of living….and housing. At the same time, I am sure those solutions can help everyone that lives in poverty. Remember, poverty is colorblind.