The Black homeownership rate that ticked up before the pandemic has again begun to fall, spurred by a widening mortgage approval gap between Black and white applicants. A Zillow analysis of data from the Home Mortgage Disclosure Act (HMDA)1 shows that while overall denial rates have decreased, Black applicants are increasingly more likely than white borrowers to be denied a mortgage.

Black applicants are denied a mortgage at a rate 84% higher than that of white applicants—a big jump from 2019, when the disparity sat at 74%. In the U.S., 19.8% of Black applicants are denied a mortgage, the highest among all races, and much higher than the 10.7% of white applicants who are denied.

More than 6% of Black applicants are denied based on credit history, accounting for over one-third (37%) of all Black borrower denials. Limited traditional financial services in Black and other communities of color is a significant factor in credit history. Black communities have a higher number of nontraditional services, such as payday lenders, which contributes to poor credit health.

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