New Study Finds No Evidence of Racial Bias in HouseCanary’s Automated Comparable Selection and AVM Tools
Highlights That HouseCanary’s Valuation Technology Continues to Be Fair as The Percentage of Racial Minorities in a Locale Increases
SAN FRANCISCO–(BUSINESS WIRE)–HouseCanary, Inc. (“HouseCanary”), a national brokerage known for its real estate valuation technology and accuracy, today released the results of a study entitled “Reducing Racial Bias in Home Appraisals Using Automated Valuation Technology.” The full study can be viewed here.
In September 2021, Freddie Mac published a report, titled “Racial and Ethnic Valuation Gaps in Home Purchase Appraisals,” which found severe and systemic bias present in property appraisals, concluding that – through the traditional appraisal process – racial minorities are more likely to receive an appraisal value that is lower than the price the property was sold for.
HouseCanary, which has developed industry-leading valuation technology, conducted a statistical study to measure the accuracy of its automated valuation model (“AVM”) and comparable (“comp”) property selection tools in appraising homes in minority neighborhoods. In particular, HouseCanary sought to determine whether use of its automated property valuation technology could mitigate the effects of appraisal bias highlighted in the Freddie Mac report.
Based on a thorough assessment of its automated valuation technology, HouseCanary’s study resulted in the following key findings:
Jeremy Sicklick, Co-Founder and Chief Executive Officer, commented: “Appraisal bias affects thousands of minority American families every year, resulting in the pervasive undervaluation of Black and Latino-owned homes, as Freddie Mac uncovered in its report on the traditional appraisal process earlier this year. At HouseCanary, we have built and developed industry-leading valuation technology to provide highly accurate, objective property information for all. The results of our assessment clearly demonstrate the effectiveness of automated valuation tools in reducing racial bias and discrimination compared to traditional appraisals. We believe this research is extremely promising for the future of the real estate industry, with the potential to catalyze systemic change and promote equality throughout the entire homeownership journey.”
Additional findings can be reviewed in the full study here.
Founded in 2013, valuation-focused real estate brokerage HouseCanary empowers consumers, financial institutions, investors, and mortgage lenders, with industry-leading valuations, forecasts, and transaction support. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com.
If you are currently working with a real estate agent, this is not meant as a solicitation of your business.
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AVM Disclosure: An AVM is an estimated sale price for a property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.
Casie Connolly / Bela Kirpalani