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Op-Ed: Respect the Black Dollar

This piece originally appeared in the March 2023 edition of MReport magazine, online now.

This month, as we continue to celebrate the contributions of Black Americans and Black Excellence, LeBron James made headlines for surpassing Kareem Abdul-Jabbar’s all-time high scoring record in the NBA. It is a remarkable achievement in athletics with one Black man surpassing the accomplishments of another Black man.

Black excellence is routinely celebrated in professional sports, with Black athletes representing 73% of NBA players and 58% of the NFL. This year’s Super Bowl featured two Black quarterbacks, in another example of Black men making athletic history. And while Blacks continue to excel in this capacity, unfortunately, we continue to lag in one critically important arena: homeownership.

According to a recent report, the Black homeownership rate continues to trail our White counterparts in this country by 30 percentage points. And while it is true that Blacks on average have less annual income than Whites, the Black dollar is responsible for a large portion of consumer spending in our country. In fact, a recent study found that in 2021, the Black dollar was responsible for over $1 trillion in spending on consumer goods and services. Furthermore, Black Americans were responsible for 20% of all luxury goods purchases in 2021, even though we only represent 13% of the American population.

Wait a minute–we make less money than other races, but spend more on luxury goods and services, and have the lowest homeownership rate of any other race. Something is not right here …

The time has come, that we, as a Black community, make a dynamic shift in our spending patterns and place critical importance on investing in ourselves and our families. Investing in ourselves means prioritizing our dollar spend in ways that directly increase the wealth within our Black households and transitioning that wealth to future generations. And for the majority of Americans, the No. 1 vehicle supporting wealth creation is investing in sustainable homeownership.

The question remains: How can we as a mortgage lending industry create more opportunities to support our Black brothers and sisters in becoming sustainable homeowners?

My humble answer: Take Black women seriously as a viable base to increase homeownership in our community.

According to this report from Urban Institute, the Black female demographic has increased our share in households headed by women to just over 60%, which is more than any other racial demographic. In fact, over the last 30 years, Black women have increased their homeownership rate by 5.6%, while Black men have experienced the greatest decrease in homeownership over the same time period. Additionally, Black women have the highest labor force participation rate of all women.

That said, Black women remain the most underserved segment of all potential household formations, across these racial and gender divides. And instructing loan officers to blindly target Black females is hardly going to be an effective industry strategy.

It is incumbent upon the mortgage industry to create meaningful and trustworthy outreach to Black Americans–and more specifically, Black women. And this certainly goes beyond slapping smiling Black faces on marketing material. True outreach means robust homebuyer education, taking time to shepherd potential homeowners slowly through the home buying process, and educating our underserved communities about down payment assistance programs, special purpose credit programs, and mortgage credits that are available to bridge the gap toward becoming a homeowner.

Having processes in place to support these underserved markets is a critical part of showing our communities of color that we are serious about advancing their homeownership. It also goes a long way to healing some of the financial trauma and distrust in banks that hold back minority communities. And we are seeing some progress. Arrive Home was created to provide down payment assistance and earned equity incentives to Black and minority homebuyers. And while we are not alone, there is still much to be done to significantly increase the number of Black homeowners in our country.

Last month, Fannie Mae announced the selection of five organizations to receive deliverable-based contracts under the Sustainable Communities Innovation Challenge, a nationwide competition to help advance racial equity in housing.

Guaranteed Rate is offering Special Purpose Credit Programs that will provide up to $8,000 in assistance to potential first-time homebuyers from underserved communities.

Despite these advances there is still measurable discrimination against Black Americans in all financial services, primarily in the form of higher interest rates and lower credit approvals. I echo the recent Black History Month speech from Federal Reserve Vice Chair Michael Barr at the Hope Economic Mobility Forum at Jackson State University, who said that more needs to be done to eradicate discrimination in our financial institutions.

As we seek to diversify our industry by bringing in more young folks and people of color, let us listen deeply to these new groups of individuals. Hiring diverse talent creates a broader range of life experiences and perspectives. This can result in creating innovative solutions and programs that will help to begin to shrink the continually expanding racial homeownership gap.

Five generations ago, my great, great, great grandfather, who was born enslaved, decided to prioritize homeownership after he was emancipated. Upon his death in 1902, the 66-year-old had accumulated 50 acres of land and left a home to each of his eight children. I am so proud of my family history and filled with gratitude to be a beneficiary of the decisions he made so long ago. The time is now for a new generation of Black Americans to use the power of the Black Dollar to invest in wealth creation in our own community. And with innovative programs and creative solutions from our industry, as Sam Cooke sang, I know a change is gonna come.

About Author: Tai Christensen

Tai Christensen is the Co-Founder and Chief Diversity Officer for Arrive Home, a national down payment assistance social enterprise serving underbanked communities. Tai is also the host of the California Mortgage Bankers Association's podcast on Equity, Diversity and Inclusion. She serves as Chair of the American Mortgage Diversity Council (AMDC), and also serves as a board member for Axis Lending Academy, a non-profit that focuses on providing the mortgage lending industry with a more diverse talent pool of job candidates. Tai is a winner of the 2023 National Mortgage Professional Women of Inspiration Award, the 2022 Thought Leader Award for Progress in Lending and the 2021 Mortgage Professional America Elite Women Award. She has been featured on Fox Business News, as well as articles in the Washington Post, Mortgage Professional America, MReport, Real Estate Weekly, Forbes, and numerous podcasts. Tai is passionate about assisting credit worthy borrowers in disadvantaged communities become homeowners and build intergenerational wealth through homeownership. Tai lives in Eagle Mountain, Utah, with her husband, three daughters and their black lab, Charley. She attended Brigham Young University in Provo, Utah, and has over 20 years of experience in the mortgage industry, specializing in working with underserved communities.
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