New Law Enacted, Federal Updates and Market Trends Affecting Appraisers
In this issue:
- New federal appraisal provisions become law, with implementation now moving to federal agencies.
- A new FHA and VA webinar will explain appraisal policy updates and what appraisers should expect next.
- Rising distressed sales renew focus on comparable selection and local market analysis.
- Reserve studies are creating new advisory opportunities for appraisers beyond homeowners and condominium associations.
Distressed Sales Renew Focus on Comparable Selection
Short sales and foreclosures remain a small share of the housing market, but new Realtor.com data show that distressed activity is increasing. Nearly 30,000 short sales occurred nationwide in 2025, and transactions rose approximately 16% year over year during the first quarter of 2026. While activity remains far below Great Recession levels, trends vary significantly by market.
The changing landscape renews the relevance of the Appraisal Institute’s Guide Note 11, Comparable Selection in a Declining Market. The guidance emphasizes that appraisers should neither categorically exclude distressed sales nor automatically treat them as equivalent to conventional transactions. Read more about what the latest data mean for comparable selection and local market analysis.
AI Blog
Why the Cost Approach Still Matters in Residential Practice
The cost approach may not drive every residential appraisal assignment, but when it does, it needs to be developed with confidence and supported with sound analysis.
A new AI blog explores why Residential Site Valuation and Cost Approach remains an essential part of residential appraisal practice, from site valuation and cost estimating to depreciation analysis. Learn how this qualifying education course helps appraisers strengthen their analytical toolkit for more complex assignments.
The next live online session begins July 27.
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Federal Appraisal Update: What’s New at FHA and VA
August 20, 2026, 11 AM CT
Stay current on the latest developments affecting FHA and VA appraisal assignments. This webinar will examine changes to minimum property requirements, recent appraisal policy updates, and efforts to align federal requirements with the recent Executive Order and newly enacted legislation. Presenters will explain what is changing, what appraisers should expect, and how these developments may support clearer requirements, more consistent practices, and improved access to mortgage credit.
Panalists: TBA
21st Century ROAD to Housing Act Becomes Law
The 21st Century ROAD to Housing Act became law on July 11 after President Trump neither signed nor vetoed the legislation within the constitutional ten-day period. The law includes two measures of particular importance to the appraisal profession: the Appraisal Modernization Act and the Appraisal Industry Improvement Act.
The Appraisal Modernization Act directs federal housing agencies to develop consistent standards and procedures for reconsiderations of value and second appraisals. “As originally proposed, the legislation would have imposed a reconsideration of value process that was unworkable and inconsistent with the procedures already in place at the federal agencies and the government-sponsored enterprises,” said Scott DiBiasio, Director of Government Relations for the Appraisal Institute. “The Appraisal Institute worked closely with the Senate Banking Committee to move these requirements into the rulemaking process, where appraisers, lenders, consumer advocates, regulators, and other affected stakeholders will all have the opportunity to provide input before the final policies are adopted.”
The Appraisal Industry Improvement Act expands FHA roster eligibility to qualified state-licensed residential appraisers who complete FHA-specific education and competency requirements. It also supports alternative pathways into the profession, strengthens the Appraisal Subcommittee, and replaces a proposed public appraisal database with a Government Accountability Office study addressing feasibility, costs, benefits, and privacy concerns.
Attention now turns to implementation. Federal agencies will develop the regulations, guidance, and procedures needed to carry out the new law. The Appraisal Institute will remain engaged throughout that process, advocating for policies that protect appraiser independence, promote public trust, and support a strong appraisal profession.
Read the Appraisal Institute’s summary of the appraisal provisions.
Real Estate Horizons
Stay updated and check out links to the latest major real estate industry stories!
Your Community
Mark Your Calendar for the Virtual 2026 Annual Meeting of Appraisal Institute Membership
The Annual Meeting of the Appraisal Institute membership will take place virtually on Thursday, August 20, 2026, at 3:00 p.m. CT. The meeting will run until all business is concluded. Members will hear updates on the state of affairs of the Appraisal Institute and have an opportunity to stay informed about key organizational priorities and activities. Information on how to join the meeting will be forthcoming. The meeting will be conducted in conjunction with the third regular Board Meeting Recap and Q&A.
Beyond HOAs: Reserve Studies Offer New Opportunities for Appraisers
Reserve studies are commonly associated with homeowners and condominium associations, but their potential applications extend much further. During the Appraisal Institute’s recent Trending Topics webinar, Bernie Guthrie, General Manager, CMCA, AMS, LSM, PCAM, Lake of the Woods Association, Inc., and Jon “Jay” Dawson, SRA, AI-RRS, RS, Edge Realty Advisors, explored the growing demand for these assignments. Guthrie highlighted an assignment involving a local water authority, illustrating how reserve study concepts can help entities with substantial real estate and infrastructure holdings anticipate repairs and replacements, evaluate remaining useful life, and plan for future capital needs.
The discussion points to a potentially valuable advisory service for appraisers. Water authorities, municipalities, school systems, nonprofits, and other institutional property owners may face similar long-term planning challenges. Appraisers with the appropriate competency can apply their knowledge of property condition, depreciation, useful life, and cost analysis to help these organizations make informed decisions. Watch the webinar recording to learn more about reserve study practice and the expanding range of clients who may benefit from it.
Until Next week
Team Appraisal Institute
