In 2015, there were 55,000 mortgage appraisers. Today, there are about 35,000 – and they’re dropping like flies. Only 27,000 will remain by 2030.
We’re all doing fine now…in the slowest purchase market in history and a nearly dead refi market.
But, if rates dip and we see a surge in refis or purchases (or just get back to “normal”), we will face unimaginable appraisal delays (and higher fees, and missed rate locks and closing times).
But First: BOING!
That was the sound of rates bouncing back up today, after falling yesterday in response to Treasury Secretary Bessent’s announcement that the Treasury was going to buy long-duration Treasuries.
The impact lasted almost 12 hours before market forces reigned supreme once again. The Japanese Yen will likely boing too in the near future.
The New Appraisal Form: UAD 3.6
Fannie and Freddie are aware of the appraiser shortage, and that is partly why they are mandating the use of this new form: UAD (Uniform Appraisal Dataset) 3.6.
The form will be universal for all property types (condos, SFRs, PUDs, etc.) and will replace the numerous forms appraisers use now, depending on property type.
The form will be much more data-oriented and much less narrative-oriented. Some lenders will start to use the form in September, and it will become mandatory in November.
Appraisers are none too happy for several reasons: (1) the new form will require new software and more work; (2) it will take time to get used to (few are prepared); (3) it removes much of the art and judgment that skilled appraisers take pride in employing today – and replaces them with data input.
Why It’s Bad
- Condition Issues Exposed: The required photos and data collection will make it harder to hide minor condition issues – that will likely now have to be addressed prior to close.
- Higher Fees: The cost of appraisals will likely go up in the near term.
- Eliminates Appraiser Judgment: Skilled appraisers understand design and appeal, location, effective lot size, and updating nuances that this form may miss.
Why It’s Good
- Easier to read: The current forms vary in format and require digging into narratives. The new form will be consistent and ostensibly easier to read. The new form is also much more “machine-readable” – eliminating labor costs and speeding up review times.
- IT ADDRESSES THE APPRAISER SHORTAGE: Better data and better data collection procedures will enable there to be more: (1) appraisal waivers; and (2) hybrid appraisals.
In 2025, 26% of all mortgage transactions had appraisal waivers. Fannie and Freddie aim to markedly increase that percentage.
But the really big deal is hybrid appraisals – where a “Data Collector” inspects the property and the appraiser writes up the appraisal report.
This is a big deal for several reasons:
- Data Inspection Firms: There are already firms in place that employ inspectors who will go almost anywhere – including to remote locales appraisers do not want to travel to.
- Low Fees: These firms charge as little as $215 to do the inspection, and to turn over a data collection report that is a mostly filled-out UAD 3.6.
- More Productive Appraisers: If appraisers embrace hybrid appraisals and data collection firms, they will be able to write up 3 to 5 appraisals per day – and make much more money.
- Easier To Get Remote Appraisals Done: We have to pull our teeth out to find appraisers for remote locations. Being able to send a data collection firm to those locales will make every lender’s life much easier.
- Appraisal Fees Could Ultimately Drop: Once lenders, data collectors, and appraisers figure out the new hybrid system, fees could actually drop because of the increased efficiencies.
A few years ago, I blogged about hybrid appraisals and why I did not like them, as I thought they’d just foster delays. But today, I am very much in favor of them considering the firms that specialize in inspections, the new appraisal form, and the appraiser shortage.
