Appraisals & Valuations

Michael Neal talks Black homeownership gap and AVMs

Why are homes owned by white people valued more than homes owned by Black people?

That simple question has various complicated answers dealing with macroeconomics, home valuation models but also in some cases racism by real estate agents, lenders, and appraisers involved in the process.

For this week’s Houses in Motion, a podcast miniseries part of HousingWire Daily, HousingWire’s real estate reporter Matthew Blake spoke with Michael Neal. Neal is a researcher at the Urban Institute, who has extensively studied not just the racial homeownership gap but the racial valuation gap. 

Neal also discussed the nuts and bolts of valuation models themselves. Our conversation, for example, touched on the valuation model that Zillow attempted to use for the iBuying program it is winding down.

Here’s a sample of the conversation between Neal and Blake:

Matthew Blake: You just mentioned the labor market, and how Black households have lower income and less economic stability. So given those larger economic issues, what power does someone in real estate – an agent, an appraiser – have to overcome the racial valuation gap? Or is the cake already kind of baked because of these entrenched socioeconomic problems that are bigger than real estate?

Michael Neal: It’s important to acknowledge and to appreciate that experiences of racial discrimination and implications for Black households ability to achieve homeownership.

But I don’t think that that by itself, is enough to take, frankly, the housing ecosystem off the hook. In part, because we also observe that, even when Black households have similar incomes, their homeownership rates are still lower.

And part of that might be the result of other dynamics that are at place in terms of economics, but another argument and I think research as well as history illustrates the role that racial discrimination has played within the housing sector as well. 

HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsrooms that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Elissa Branch. If you have a pitch or an inquiry relating to podcasts, you can reach our team at

HousingWire Daily

Hosted by the journalists behind the headlines, HousingWire Daily examines the most compelling mortgage, real estate, and fintech articles reported from the HousingWire newsroom.

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