Black family, father, mother and two children, standing in front of their new home.
Getty Images.

According to a recent report on housing by the National Association of Real Estate Brokers (NAREB), the gap between Black and white homeownership is widening. However, NAREB’s 2022 State of Housing in Black America (SHIBA) Report does offer solutions, including one being enacted by a collaboration between the National Urban League and Well Fargo.

In December 2022, the NUL and Wells Fargo announced a $5 million grant to create the Diverse Appraiser Initiative, a program aimed at increasing diversity and reducing barriers to entry in the home appraisal industry—which was one of the six recommended SHIBA Report solutions.


Black homeownership rate in first quarter of 2022, down from 45.3% in 2020


Peak Black homeownership rate, 2004


Black/white homeownership disparity in 1970


Black/white homeownership disparity in 2022

(source: 2022 SHIBA Report)

However, due to the legacy and current reality of redlining, Blacks have for generations been at a disadvantage when it comes to building wealth in the form of equity via homeownership. A Brookings Institute study found that neighborhoods that were at least 50% Black had homes that on average were valued at 23% less than comparable homes in “white” neighborhoods (with less than 1% Blacks). That means homes in Black neighborhoods are undervalued on average by $48,000 which equates to a collective loss for Black people of $156 billion.

So, even though several other factors contribute to the racial homeownership gap, the damage done by home appraisals means that with less wealth and equity, banks and independent mortgage companies can claim to be justified in their loan denial rates that turn down Black applicants at a much higher rate than their white counterparts.

And according to a Bureau of Labor Statistics survey, the home appraisal industry is lilly-white, as in 97% white. The Urban Institute and others content that increased diversity in the appraiser profession can improve the current valuation bias for Black and Hispanic homeowners, which, in turn, can support more equitable homeownership outcomes.

The NUL/Wells Fargo grant offered as a corrective to this issue, seeks to certify up to 260 diverse appraisers. In addition to supporting the certification of trainees, the initiative includes entrepreneurship and small business development components with a focus on creating 130 potential new businesses.

This NUL initiative is scheduled to begin in early 2023 in Houston, Atlanta and Charlotte.

“Racial discrimination in the home appraisal industry is a significant barrier to economic equity,” said NUL President and CEO Marc H. Morial. “We’re proud to partner with Wells Fargo on this innovative project to open the doors of opportunity and bring a much-needed new approach to diversity, equity, and inclusion that we hope will serve as inspiration to others in the field and beyond.” 

“We are delighted to continue working with the National Urban League to create more opportunities for underserved communities,” said Kristy Fercho, who was recently named Wells Fargo Head of Diverse Segments, Representation, and Inclusion and continues to lead the Home Lending business. “We’re excited to mobilize the combined resources at Wells Fargo and the National Urban League to help address core barriers in appraiser certification and increase the number of diverse-owned appraisal businesses. This relationship will help to diversify the industry and improve customer confidence in home valuations.”

National Urban League will provide entrepreneurial training and support on business basics, including formation, business and financial management, and access to capital, to those trainees who are undergoing or have completed the certification process. The Urban League Entrepreneurship Centers will customize these programs for each trainee based on their experience, skill level, and interest.

“We are delighted to bring the business skills training to this industry,” said Judson Robinson III, president of the Houston Area Urban League (HAUL). “The Appraisal industry is less than 3% Black and the need to have people of color and women in this space is urgent. This partnership between Wells Fargo and the three cities selected to operate the program will reduce valuation bias and help ensure the business acumen is in place to create a sustainable minority enterprise. Getting real estate-related licenses and certifications is not new to our community, but pairing it with free, small business training for emerging entrepreneurs is.

“This investment from Wells Fargo complements the various community enhancement programs we already offer in wealth generation and community stabilization. We plan to expand the numbers of new appraisal business created over the next five years to continue improving the expertise of our small businesses while redefining the economy in our community,” added Robinson.

This collaborative effort between Wells Fargo and the National Urban League complements existing commitments by both organizations to help promote fair and equitable home appraisals and advance racial equity in homeownership.

  • In 2021, the National Urban League partnered with Fannie Mae to seek applicants for their Appraiser Diversity Initiative Sponsorship Program, which focused on attracting new entrants to the appraisal field, facilitating the transition into the appraisal profession, and helping to foster diversity in the appraisal community.
  • In May 2022, Wells Fargo identified 25 individuals to participate in the Appraisal Associate Program, a multi‑year commitment to hire and train individuals from underrepresented communities to become licensed residential appraisers (trainees were also successfully recruited for the program in 2016 and 2018). Ninety-two percent of the trainees are diverse.

The 2022 SHIBA report outlines the status of Black homeownership and the broad challenges that Black families and individuals face when they seek to purchase a home, as well as the impact of new banking trends on their family financial security.

In the first quarter of 2022, the Black homeownership rate was 44.7 %, down from 45.3% in 2020.

The Black/White homeownership disparity was 23.8% in 1970 and climbed to over 31 percentage points by 2019. In 2022 the homeownership gap is still “an astounding” 30%, the report states, continuing a two-decades trend of an expanding homeownership gap between Blacks and Whites. Equally important, the current Black homeownership rate remains far below its peak recorded in 2004, when Black homeownership exceeded 49 percent.

The report also analyzes the recent trend of non-deposit lenders, such as Fintech companies, increasing their market share of mortgages, and the impact on other bank related functions.

“Higher profit, more lucrative investment strategies for banks has come at the expense of supporting homeownership and wealth building in low-income communities and communities of color,” the report states. “Federal Reserve data indicate that in the third quarter of 2021, residential real-estate loans hit a historic low as a percentage of total assets (10%) at U.S. banks, whereas the share of safe assets – investments such as cash, Treasuries, and government-guaranteed securities – increased from the prior year. The closing of branches by larger banks in low-income areas and profit-maximizing strategies such as high overdraft fees, debit card swipe fees, ATM withdrawal fees, and wire transfer fees, among other charges, have particularly impacted low-income customers and customers of color.”

The report finds that 72% of Black applicants and 63% White applicants applied for loans at independent mortgage companies in 2021. The report notes that traditional banks continued to disproportionately attract White applicants: 33% of Whites sought loans from banks in 2021 compared to 20% of Blacks. Further, the report notes origination rates were higher at independent mortgage companies than at banks for both Blacks and Whites. 

“In 2021, denial rates continued to be lower at independent mortgage companies than at banks,” the report notes. “Disparities in denials mirror those in loan origination rates as Black applicants fared much worse than White applicants across all lender types. Black applicants had a 20% denial rate at banks compared to 8% among White applicants. At independent mortgage companies, denial rates were 13% for Blacks versus 5% for Whites.”


This year’s SHIBA report includes six recommendations outlining what Congress, regulators and the private sector must enact to improve access to the American Dream of homeownership:

  • Eliminate loan level price adjusters
  • Eliminate penalty fees for borrowers to access down payment assistance
  • Recalculate the impact of student loan debt
  • Leverage special-purpose credit programs
  • End discriminatory and abusive appraisal practices
  • Fix the broken and out-of-date housing finance system

The report cites a study by the National Association of Realtors identifying millennials as the largest segment of Black homebuyers in the wake of the COVID-19 pandemic. The trend continued in 2021, but declining affordability likely contributed to a slower growth rate of Black millennial homebuyers since Spring 2021. The report cites another issue that may be a drag on Black homeownership:

“Black college graduate millennials have less than one tenth the wealth of their white counterparts. Further, student loan debt represents a major challenge for Black millennia homebuyers, as it can limit the amount of savings that can be used for a down payment. Black millennials owe more in student loans and carry that debt longer than other groups. And because Black households have less wealth and fewer savings on average than the general population, Black millennials rely less on their families’ financial resources when purchasing a home than white millennials.”

Aswad Walker

I'm originally from Cincinnati. I'm a husband and father to six children. I'm an associate pastor for the Shrine of Black Madonna (Houston). I am a lecturer (adjunct professor) in the University of Houston...