A new study by the real-estate firm Zillow found that nearly 20% of Black mortgage applications nationwide were denied in 2020, nearly twice the rate of white applications.

Nationwide, the study found that Black mortgage applicants were turned down 84% more than white applicants, up from 74% in 2019.

Zillow said the findings, based on federal Home Mortgage Disclosure Act data, help explain the homeownership gap between Black people and whites. According to the U.S. Census, 44% of Black people own homes (down from a peak of 49.7% in 2004), compared with 74% of whites and 48.3% of Hispanics.

“Homeowners have seen a plethora of housing gains during the pandemic, but the growing disparity between Black and white homeownership rates and home values paints the picture of who those winners actually are,” said Zillow economist Nicole Bachaud, in a news release about the study.

The study looked strictly at mortgage denials, and did not address whether different races with similar incomes, credit scores, payment history or other loan criteria were approved at different rates.

But the study does shed light on the reasons Black people are denied mortgages.


Zillow found that more than 6% of Black applicants were rejected because of credit history, accounting for 37% of all Black mortgage denials, illustrating Blacks’ historic lack of access to credit.

“While credit borrowers overall are stronger now than ever, the gap in credit access is growing along racial lines,” Bachaud said.

In the study, Zillow applauded efforts to expand Black access to credit, such as the recent decisions by federal mortgage services Fannie Mae and Freddie Mac to allow rent payment to count toward credit history.

Zillow found that Black mortgage applicants were denied most frequently in Mississippi (31%), Louisiana (26.1%), Arkansas (26%) and South Carolina (25.8%).

Zillow also noted that Black-owned homes are worth 16.7% less than homes overall. While Black-owned homes are appreciating at higher rates than homes overall, they would take over 22 years to catch up, at current appreciation rates, according to Zillow.