A cluster of stories about appraised values of homes in
minority areas hit the national news earlier this summer and now Freddie Mac
has released an analysis of the smoke/fire variety. The company says it found appraised
values are more likely to fall below the
contracted sale price of a home in census tracts with a higher share of Black
and Latino households, resulting in what is known as an appraisal gap. This is
precisely what was alleged in news reports. Further, the extent of that gap
increases as the percentage of persons of color living in the census tract
grows. Freddie Mac based its analysis on 12 million appraisals it received as
part of the home purchase process between 2015 and 2020.

 

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