A recent study has found that race has become an even bigger factor now than it was in the 1980s when determining the appraisal value of a home, penalizing in particular Black homeowners, said Bloomberg. The sociological study from academics at the University of PIttsburgh and the University of New Mexico found that, despite modern appraisal practices meant to address racial justice issues in real estate, the problem has only grown. Analyzing reported home values,researchers found that the difference in average home appraisals between neighborhoods that are majority-white and those that are predominantly Black and Latina was $164,000 in 2015, up from about $86,000 in 1980.

One reason for this ongoing disparity was the "sales comparison approach" in real estate appraisal, whereby a home's value is determined by the prices of other similar homes that were recently sold in the same neighborhood. Bloomberg said the industry saw this as a race-neutral way of appraising home value, but the effect of this has been to basically grandfather in the same racist redlining that dominated before the implementation of fair housing laws. This would also explain why, despite redlining and other practices being outlawed decades ago, real estate values in predominantly Black neighborhoods remained largely unchanged.

Bloomberg noted that the gap should have narrowed over time, as the growing number of non-white home buyers raised demand for homes in diverse neighborhoods. However, the researchers found that, even in the 21st century, in neighborhoods where Black and Latina populations have grown by 1 percent a year, the average appraised value of homes fell by $22,000 between 1980 and 2015, while the average appraised home value in neighborhoods that grew whiter at the same rate rose by $73,000. 

The study's findings dovetail neatly with recent news that the Federal Reserve is considering reforms to its regulations on the Community Reinvestment Act, the '70s legislation that outlawed redlining in the first place. But the overhaul would concern not appraisals but bank loans in lower- and middle-income neighborhoods to help more people secure bank financing for home ownership.