The metropolitan areas with the largest gaps in homeownership rates are concentrated in the Midwest and the Northeast, according to the Urban Institute report. Four of the five metropolitan areas with the largest number of black households—Atlanta, Chicago, New York City, Philadelphia and Washington, D. C.—are in this region.

Major cities with the smallest disparities in the homeownership rate among whites and blacks, such as Charleston, S.C. and Austin, Texas, still had differences of roughly 20 percentage points.

“Lenders and Realtors need to be paying attention to this. There’s a lot of opportunity to close a huge gap. There’s no reason the gaps should be this wide,” said Alanna McCargo, vice president of the Housing Finance Policy Center at the Urban Institute.

The overall U.S. homeownership rate rose to 64.2% in the fourth quarter of 2017 from 63.7% a year earlier, according to the U.S. Census Bureau. But minority groups, such as Hispanics and blacks, were hit hard by the foreclosure crisis and have struggled to recover.

A separate report released Tuesday found that while the homeownership rate for the Hispanic population remains below that of whites, it is climbing. Hispanics increased their rate of homeownership to 46.2% in 2017 from 46% a year earlier, a net increase of 167,000 new owner households, according to a report released by the Hispanic Wealth Project and the National Association of Hispanic Real Estate Professionals.

More restrictive immigration policies, a lack of housing inventory, and natural disasters in places such as Texas, Florida and Puerto Rico with large Hispanic populations were headwinds in 2017 and could remain obstacles this year.

Write to Laura Kusisto at laura.kusisto@wsj.com