  This paper investigates gaps in access to and the cost of housing credit by
race and ethnicity using the near universe of U.S. mortgage applications. Our
data contain borrower creditworthiness variables that have historically been
absent from industry-wide application data and that are likely to affect
application approval and loan pricing. We find large unconditional disparities
in approval and pricing between racial and ethnic groups. After conditioning on
key elements of observable borrower creditworthiness, these disparities are
smaller but remain economically meaningful. Sensitivity analysis indicates that
omitted factors as predictive of approval/pricing and race/ethnicity as credit
score can explain some of the pricing disparities but cannot explain the
approval disparities. Taken together, our results suggest that credit score,
income, and down payment requirements significantly contribute to disparities
in mortgage access and affordability but that other systemic barriers are also
responsible for a large share of disparate outcomes in the mortgage market.
