A Freddie Mac study released in 2021 indicated that the average distance between the subject and comparable properties is _______ in a Black or Latino tract, as compared to a White tract.

• A. Substantially larger
• B. About the same
• C. Substantially smaller
• D. Not enough data

Answer: (C)

This item is about how far appraisers typically look for comparable sales, and how that search distance varies by neighborhood racial composition. The Freddie Mac study from 2021 found that the average distance to comps is substantially smaller in Black or Latino tracts than in White tracts. In other words, when valuing properties in minority neighborhoods, appraisers tend to use nearby sales rather than pulling in farther-away comparisons. This pattern can reflect data limitations or systematic practice differences, and it matters for fair housing because using a narrower set of comparables can influence valuations and, in turn, loan decisions in minority communities.

If the distance were substantially larger or about the same, that would contradict the study’s findings, and not enough data would ignore the empirical result the study reported.