NCRC: ‘mystery shopper’ study shows bias in appraisal industry

Having employed “mystery shoppers” in an investigation, the National Community Reinvestment Coalition reported Tuesday that racial bias continues to plague the home appraisal industry.

Using inter-racial couples in the Baltimore, MD area, the NCRC hired appraisers to evaluate homes owned by the couples. In some cases, an appraiser was led to believe the homeowner was Black and in other cases, an appraiser was led to believe the owner was White. Fourteen different appraisals were conducted in seven tests.

The NCRC reported that appraisers assigned higher average monetary values when they believed the home was White-owned. White testers further received valuations $7,000 higher on average than their Black partners who showed the same home. The racial discrepancies were as high as 9% and 13% in two cases, according to the group.

Background and NCUA Involvement

A Biden Administration task force that included the NCUA has called for changes in the appraisal industry, including efforts directed at increasing diversity among appraisers.


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