Property Appraisal Equity or Valuation Equity (PAVE), refers to the goal of property appraisals being impartial, racial and ethnic. This means that everyone should be able to access property appraisals and property value.

The history of home appraisals has been influenced by biases. Inequalities and discrimination have had adisproportionate impact on communities of color. This has resulted in America’s racial and ethnic wealth gap. This inequality has caused significant differences between homeownership rates for people of different races, backgrounds, and financial returns associated with owning homes.

The average White family will have eight times the wealth of a typical Black family in 2022, while the average Latino family will have five times the wealth in 2022.

PAVE has been an idea and goal for many years. In 2021, however President Joe Biden announced that an appraisal bias task force would be created to evaluate the causes and consequences of home valuation bias and to make recommendations on how to reduce it.

Understanding Property Appraisal & Valuation Equity

PAVE refers a situation when home valuations or valuations are fairer than they are today.

Home appraisals are an integral part of any transaction. There are many options for valuing your property.

The Uniform Residential Appraisal Report (Fannie Mae) is used for single-family homes. The report asks for the appraiser’s description and comparisons of the property’s surroundings.

Based on their observations the appraiser will provide a valuation along with other conclusions about the property’s worth.

Home appraisals are subjective and can result in bias in property valuations. Researchers have seen a significant difference in the market value of neighborhoods that are majority Black and those which are majority White for decades. Homes in areas with a majority of Black residents are more valuable than those in white neighborhoods. This disparity cannot simply be explained by objective measurements of a property’s attributes, such as its age or location to public transport.

Recent studies show that appraisal reports contain an “appraisal commentary”. This is one reason. This section allows the appraisers to give their reasons for valuing a property.

Research shows that appraisers use ethnic and racial references to reduce the home’s value.

The Impact of Property Appraisal Equity on Valuation Equity

Inequitable valuations, or a property’s value below its contract price, can have devastating consequences for both individuals as well as communities.

An appraisal is an important part of home-buying. It determines the property’s value for a loan.

Sometimes, a lower-than contract appraisal can result in a homeowner paying a greater down payment. This can result in a sale being canceled.

Also, wealth creation is an important source in the United States. According to estimates, nearly two-thirds American households own home equity.

Inequitable appraisals could have a ripple impact on entire communities. In their valuations, appraisers take into account the neighborhood’s purchase prices. This could also be affected by racial/ethnic bias.

Any instance in which the purchase price is lower will be considered a candidate for an appraiser who will then choose a comparable sale within the community. This will reflect the downward effect of the lower price.

Even a slight undervaluation can make a big difference in property values and homeowner wealth accumulation.

The U.S. has experienced structural barriers to homeownership because of biases and discrimination in property appraisal.

Research indicates that biases have become more common. According to the U.S. Census Bureau’s data, home values in 2015 were more affected than in 1980 by the racial makeup within a particular neighborhood. Researchers identified this as a major reason for the growing racial wealth gap.

Researchers found that White neighborhood homes appreciated by $200,000 in the same time frame as similar properties in communities with color. 10

The PAVE Task Force

There have been many efforts to reduce biases in home-appraisers. On the centennial anniversary of Tulsa Race Massacre on June 1, 2021 President Biden announced the creation of an interagency task force called the PAVE Task Force. The Task Force was given the task of:

  • Analyze the causes, consequences, as well as the extent of appraisal bias
  • Create a list of transformative recommendations to remove racial and ethnic biases from home valuations

PAVE, an interagency task team, is the first of its type and makes the greatest effort to reduce home appraise discrimination since decades. The task force is made up of 13 federal departments and agencies. Marcia L. Fudge, Secretary for U.S Housing and Urban Development, and Ambassador Susan E. Rice are the Directors of the Domestic Policy Council.

PAVE has initiated an independent review of Uniform Standards for Professional Appraisal practices (USPAP) in order to identify potential barriers for entry by underrepresented groups.

Also, in November 2021, the Federal Housing Administration issued a Mortgagee note to clarify nondiscrimination requirements applicable to lenders, appraisers and lenders. 3 11

Has Racial Discrimination Affected Home Appraisals?


What solutions were proposed to correct the inequalities in home appraisals?

Solutions include training in how to avoid unconscious racist behavior, updating professional ethics guidelines, and scholarships to increase diversity within home appraisers.

What can you do if you are a victim to home appraisal bias

If you feel discriminated based on your marital status, religion, or use public assistance, there are steps that you can take.

You can file a complaint with the U.S. Consumer Financial Protection Bureau, or to the CFPB. Department of Housing and Urban Development.


Appraisal Equity (PAVE) is the idea that property appraisals shouldn’t be biased. Home appraisals are subjective, and may result in bias in the valuation.

Researchers have seen a difference in the market value of neighborhoods that are predominantly Black or majority-White for decades.

An appraisal that undervalues a property can lead to serious consequences. Many families view their home as their greatest asset.

Systematic undervaluation can lead to significant property losses or accumulation of wealth for homeowners who live in the area.