In the 15 years that Christopher and Tysharda Thomas have owned their brokerage, New 2 U Homes, the national homeownership rate for Black households has only increased by 0.4% (44%). In Rochester, New York, the disparity between Black (33%) and white (71%) homeownership is a gaping 38 points. “That’s a jarring statistic…we’re kind of on the front lines here,” Christopher comments.
The Thomas’ have built a successful business supporting first-generation homebuyers, cultivating agents and educating the community. Tysharda Thomas explains, “We start with hope, the idea that they don’t have to continue to be renters all their life just because that’s what they’ve always seen.” Confronted with enduring inequities, the Thomas’ find purpose in working with their clients to overcome the barriers to homeownership.
According to the National Association of REALTORS®’ (NAR) 2023 Snapshot of Race and Homebuying, an estimated 17% of white renters can afford to buy a median-priced home compared to just 9% of Black renters. The legacy of discrimination in housing, employment and education has left Black Americans with fewer resources and heavier debt burdens. As a result, Black buyers are twice as likely to be rejected for a mortgage than white buyers.
In contrast, NAR’s data shows that white buyers are significantly more likely to leverage the sale of an existing home for a down payment, reflecting generations of homeownership supported by exclusionary federal and private programs. In the absence of generational wealth, Black homebuyers were three times as likely to draw down retirement savings to fund down payments.
To address this barrier, NAR supports the development and funding of public and private Down Payment Assistance (DPA) programs at the federal, state and local levels. “We are first-time homebuyer specialists. We love all the grants, but we don’t love contingencies,” Tysharda Thomas cautions. “It puts a cloud over our offer.” Reflecting on the attitudes of many sellers and agents toward downpayment assistance, “I think implicit bias has a lot to do with what we’re experiencing.”
Low credit scores are the primary reason Black mortgage applicants are rejected. NAR has long recognized that credit scores fail to capture prospective buyers’ most significant household expenses, such as rent and utility payments. Homeownership advocates applauded recent announcements by the Federal Housing Finance Agency (FHFA) and Federal Housing Administration (FHA) to use updated credit scoring models and positive rental payment history to qualify buyers for loans.
Brokers have a choice when encountering clients facing these barriers. “They just need to know what to do with them when they come in the door, and it’s not send them back out the door with their tail between their legs, disappointed and rejected,” Christopher Thomas quips. While not every brokerage has the bandwidth to offer programs to support aspiring homeowners, “They should have a phone number or a resource to call.”
Despite the persistent and evolving barriers to homeownership, the Thomases find hope in every closing. “Every time we close, every time someone tells me that they would have never done it without us…those little moments give me a little boost of energy,” Tysharda Thomas says. “We haven’t seen those numbers change. We’re not even anywhere near closing the gap, but if we don’t have hope, then nothing is going to get done.”
For more information, https://www.nar.realtor/.
