A More Equitable Housing Market Starts with Objective Appraisals

Recent guidance from Freddie Mac has renewed attention on a long-standing issue in residential valuation: the use of subjective or imprecise language that does not materially support an opinion of value and can introduce unintended bias into appraisal reports.

Terms such as “prestigious,” “family-friendly,” or “desirable” have historically appeared in appraisals as shorthand descriptions. While often well-intentioned, these phrases are not defined by objective criteria and do not describe market behavior in a way that can be independently verified. When used without measurable context, they shift the appraisal away from data and toward interpretation.

What the introduction of subjectivity actually means

Subjectivity in an appraisal does not usually involve explicit bias or overt exclusion. It more often appears when descriptive language implies conclusions that are not directly supported by measurable facts.

When an appraisal includes subjective descriptors, it moves beyond documenting observable conditions and begins to suggest preferences or qualitative judgments about a property or neighborhood. Appraisals are not intended to evaluate lifestyle appeal or social characteristics. Their role is to analyze how properties are priced and transacted in the market.

Once language lacks a defined measurement, it becomes open to interpretation. Different readers can reasonably assign different meanings to the same phrase. That variability creates risk, both from a fair housing perspective and from a consistency and review standpoint.

How subjective language shows up in practice and how to correct it

The examples below illustrate how common phrases introduce subjectivity and how they can be replaced with descriptions based entirely on measurable or documentable data.

Example 1
Subjective: “The property is located in a desirable, family-friendly neighborhood.”
Objective: “The neighborhood consists primarily of owner-occupied single-family residences, with public elementary and middle schools located within the same school district, and publicly maintained park facilities within the neighborhood boundaries.”

The objective version relies on land use composition, school district assignment, and public amenities that can be verified.

Example 2
Subjective: “The home is situated in a prestigious area with strong market appeal.”
Objective: “Recent closed sales within the defined neighborhood over the past twelve months reflect sale prices that are higher than the median sale prices observed in the broader market area.”

Here, market appeal is demonstrated through pricing behavior rather than characterization.

Example 3
Subjective: “The location is ideal for professionals seeking convenience.”
Objective: “The property is located approximately 1.2 miles from the primary employment corridor identified in the market area analysis and approximately 0.8 miles from neighborhood retail and service uses.”

Distances are stated numerically, eliminating ambiguity.

Example 4
Subjective: “The area offers easy access to transportation and services.”
Objective: “The property is located within 0.5 miles of a signalized arterial roadway and within 1.0 miles of grocery, medical, and retail service uses.”

Again, access is described in terms of measurable distance rather than perception.

In each case, the objective description communicates the same underlying information while remaining verifiable, defensible, and consistent with appraisal standards.

Why intent is not the issue

In most cases, appraisers do not intend to introduce bias or exclusion. The issue is not motive, but how language functions once the appraisal is reviewed, underwritten, or relied upon by third parties.

Appraisal reports are read by lenders, investors, reviewers, regulators, and sometimes courts. Subjective or undefined terms create interpretive space that can lead to misunderstanding or compliance challenges unrelated to the underlying analysis. Objective language limits that risk by anchoring conclusions to observable facts.

What Freddie Mac’s guidance reinforces

Freddie Mac’s guidance reinforces that appraisal reports should rely on measurable attributes and documented market behavior, rather than qualitative descriptors. Context is still appropriate, but it must be grounded in facts that can be replicated and reviewed.

Appraisals are strengthened when they explain what is occurring in the market, how comparable properties are priced, and which physical or locational characteristics are influencing buyer behavior, without attributing intent, preference, or desirability.

Objectivity as a foundation, not a constraint

A more equitable housing market does not require a new valuation theory. It requires discipline in applying existing standards.

By focusing on quantifiable characteristics, supported adjustments, and documented market trends, appraisals can fulfill their role as independent, third-party analyses without introducing unnecessary subjectivity. Clear, objective language supports consistency, transparency, and confidence in the valuation process.

Equity in housing finance depends on trust in how value is determined. That trust is reinforced when appraisals communicate clearly, rely on measurable data, and avoid language that implies judgment rather than analysis.