Compounding those denial rates: The vast number of people who do not even apply for loans.

“The black-white homeownership divide in the U.S. is perniciously long lasting,” said Zillow Senior Economist Skylar Olsen. “We can talk about denial rates all we want, yet the divide begins before mortgage applications are ever filled out.”

“We have seen the re-emergence of a dual market in the mortgage market, with higher-cost FHA lenders dominating African-American neighborhoods,” said Dan Immergluck, a professor at the Georgia Institute of Technology and an expert in housing and community development issues.

While black neighborhoods and borrowers need FHA loans, they also need more conventional loans, Immergluck said. He called for increased scrutiny of fair lending practices among conventional lenders, as well as so-called “duty-to-serve” requirements of Fannie Mae and Freddie Mac involving low- and middle-income families.

Such scrutiny would “make sure that all borrowers and neighborhoods have access to low-cost credit at equal terms,” Immergluck said.

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