Study shows race-based disparities in home appraisals
A new study from Illinois Realtors examines how race plays a role in mortgage appraisals and approvals.
The study found substantial disparities. Homes in mixed-race neighborhoods are likely to be appraised at a lower value. Additionally, Black applicants are twice as likely to have a mortgage denied for lack of collateral than white applicants.
Director for Local Government and External Affairs Gideon Blustein said the study shows a need to diversify the field and he says work needs to be done to make sure the industry can attract appraisers from all backgrounds
"What are the barriers for entry for getting into the appraisal industry and diversifying the appraisal industry so that it looks, or is more reflective of the population at large?" Blustein said, as an example of questions that should be considered by the industry.
Transparency in mortgage appraisal data could also reduce bias, according to Blustein and lead researcher Dr. Marshall Jean.