NewsLocal News

Actions

Houses in primarily Black neighborhoods are undervalued by an average of $46K, study suggests

Experts expect mortgage rates to remain low for first half of 2021
Posted at 9:17 AM, Apr 23, 2021
and last updated 2021-04-23 19:44:43-04

According to a study by Redfin, homes in primarily black neighborhoods are undervalued by an average of $46,000 nationwide.

Redfin gathered value estimates for more than 7 million homes that were listed and sold from 2013 through February 2021 accounting for factors such as size, condition, neighborhood amenities and schools.

Redfin's data for Milwaukee shows that homes in Black neighborhoods, on average, are undervalued by just over $40,000. The average sale price for homes in white neighborhoods in Milwaukee is estimated to be right around $133,000 and $79,000 for homes in Black neighborhoods.

“Our analysis rules out all the factors that are typically associated with home value and still finds a significant difference between the values of otherwise nearly identical homes in similar Black and white neighborhoods. We’re left with bias and systemic racism to explain the variation in home values,” said Reginald Edwards, a senior economist at Redfin. “Today’s Black homeowners are missing out on $46,000 worth of wealth due to racist housing policies that were outlawed in the 1960s and continuing biases among homebuyers and housing professionals in parts of the homebuying process like appraisals and mortgage lending—and that’s $46,000 that would multiply as the years go on and benefit future generations.”

There are only three cities according to Redfin's study where homes In Black Neighborhood aren't undervalued. Those cities are Pittsburgh, Houston and Fort Wayne, IN.

Report a typo or error // Submit a news tip