The


Federal
Housing
Finance
Agency
(FHFA)
this
week
published
a
blog
illustrating
that

appraisal
gaps
between
white,
Hispanic/Latino
and
Black
households
have
diminished
since
the
2022

announcement
of
the
Interagency
Task
Force
on
Property
Appraisal
and
Valuation
Equity
(PAVE)
action
plan,
which
the

White
House
claims
to
be
“empowering
consumers
with
new
tools
and
greater
awareness
of
appraisal
bias.”

“​Since
the
release
of
the
PAVE
Action
Plan,
many
stakeholder
actions
at
the
federal,
state,
and
local
levels
have
increased
awareness
of
racial
bias
in
home
valuations,
and
there
has
been
increased
regulatory
and
supervisory
focus
on
discriminatory
appraisals,”
the
FHFA
blog
post
explained.
“The
PAVE
Action
Plan
also
included
strategies
and
recommendations
to
improve
the
data
available
to
study
and
monitor

valuation
bias.”

After
the
launch
of
the
action
plan,
the
FHFA
published
a
separate
blog
post
in
August
2023
that
found
“the
appraisal
valuation
gap
continues
to
exist
between
white
and
minority
population
tracts.”
But
the
data
also
suggested
that
a
reduction
in
the
appraisal
gap
had
taken
place
“following
the
release
of
the
PAVE
Action
Plan
as
compared
to
the
time
period
before
the
initiation
of
the
PAVE
Task
Force.”

In
the

new
blog
post,
the
FHFA
cites
data
from
the
Uniform
Appraisal
Dataset
to
examine
two
distinct
time
periods:
one
for
appraisals
conducted
from
first-quarter
2013
through
second-quarter
2021
(prior
to
the
formation
of
the
task
force),
and
one
for
those
conducted
between
Q2
2022
and
Q4
2023,
representing
all
available
data
after
the
announcement
of
the
action
plan.

Based
on
this
data,
the
appraisal
gap
for
consumers
in
census
tracts
with
majority
Black
and
Hispanic/Latino
populations
compared
to
the
gap
in
white-majority
tracts
before
the
PAVE
action
plan
(phase
one)
and
after
its
release
(phase
two)
show
a
notable
difference.

In
phase
one,
Black-majority
tracts
saw
a
6%
gap
in
appraisals,
while
Hispanic/Latino-majority
tracts
saw
an
8.3%
gap.
In
phase
two,
the
Black-majority
gap
shrank
to
3.8%,
while
the
Hispanic/Latino
majority
tract
fell
to
5.1%.
The
reduced
gap
“declined
in
nearly
all
states
with
data
available
in
phase
two
as
compared
to
phase
one.”

FHFA,
however,
is
also
careful
to
say
that
this
does
not
necessarily
represent
causation
from
the
PAVE
action
plan.

“Further
analysis
is
needed
to
determine
whether
this
is
a
causal
relationship,”
FHFA
stated.
“The
findings
in
this
blog
are
a
promising
trend
as
public
and
private
stakeholders
continue
their
efforts
to
eliminate
home
valuation
inequities.”

There
were
also
a
handful
of
states
where
appraisal
gaps
widened
between
the
phases.
In
Mississippi,
there
was
an
increase
in
the
gap
for
Black-majority
tracts
between
phases,
while
Hispanic/Latino-majority
tracts
also
saw
the
gap
grow
between
phases
in
Florida,
New
Mexico
and
Texas.

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