The red-hot housing market is leaving people of color behind. JPMorgan is pushing for new rules to fight ‘appraisal bias’ in real estate

• JPMorgan announced a list of new policies aimed at fighting racial biases in the housing market.
• The bank says it wants to bring "equitable access to affordable housing" and "economic opportunity for renters and homeowners."
• Just last month a Black homeowner from Indianapolis got appraised $100,000 more for her home when her white friend stood in for her.
• See more stories on Insider's business page.

A red-hot housing market that's seen homes go for well above their asking price, catalyzed intense bidding wars, and caused shortages of home-improvement materials could harm first-time homebuyers, especially people of color and low-income households, JPMorgan says.

The bank, the US' largest by assets, released a slate of policy solutions this month that it says can help fight racial biases in the housing market and housing inequality that have prevented people of color from "fully participating in the housing market."

"As the demand for affordable housing continues to outpace the supply across the country, rising housing prices make it increasingly difficult for many individuals and families to afford and sustain housing, especially housing located in opportunity connected communities with greater access to jobs and economic mobility," the bank said in a paper.

"This has had an outsized negative impact on those most at risk of housing insecurity before the crisis-Black and Latinx households and people earning low incomes," it continued.

Specific initiatives include policies to:

• "Build on COVID-19 protections to effectively support homeowners,"
• "Simplify loan servicing standards,"
• "Leverage public funds to help homebuyers meet down payment requirements,"
• "Expand funding to increase supply of affordable homes for purchase,"
• "Advance reforms to increase mortgage market liquidity to improve access to affordable and sustainable mortgages that better serve people of color and low-income borrowers,"
• "Encourage federal housing policies that advance fair housing and address discrimination," JPMorgan said.

"There are systematic barriers in housing - and we have a role to play in addressing them," Heather Higginbottom, president of the JPMorgan Chase Policy Center and co-head of global philanthropy, told CNN.

According to NBC News, many experts say that appraisal biases create a huge disadvantage for homeowners of color. That's especially problematic given the US is in the biggest housing boom since the early 2000s.

In June, Insider reported that a Black homeowner in Indianapolis received extremely low appraisals for her home, and she suspected it was because of her race. She decided to have her white friend stand in for her on a third appraisal, and to her surprise, the white man was appraised for more than $100,000 more.

"I had to go through all of that just to say that I was right and that this is what's happening," Carlette Duffy told the Indianapolis Star. "This is real."

Real estate agents have also told Insider that buyers with significant assets to liquidate -- either another home or substantial stock holdings -- are easily able to outbid other potential buyers.

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