2:00

10 for white borrowers. That comes to

2:02

us from federal data from the 2023

2:05

Home Mortgage Disclosure Act compiled recently by

2:07

Zillow. Now, this gap has

2:09

some serious consequences. Today,

2:11

nearly three quarters of white households own

2:13

their home, compared with nearly

2:16

half of black households. Marketplace's

2:18

Stephanie Hughes has more. The

2:21

most common reason lenders gave for

2:23

turning down black would be borrowers'

2:25

credit history. That's a record of

2:27

your finances and how you've handled debt captured in

2:29

your credit score. Black consumers are

2:32

more likely than white ones to have a lower

2:34

credit score or no score at all. Michael

2:37

Neal is a senior fellow in the Housing

2:39

Finance Policy Center at the Urban Institute. So

2:41

right there, you're out of the race the

2:43

traditional way that we assess your ability to

2:46

repay a mortgage. Neal also

2:48

points out historic discrimination in the

2:50

housing market still has consequences for

2:52

black borrowers today. In the past,

2:55

lenders could turn black applicants away because

2:57

they lived in poor and often primarily

2:59

black neighborhoods. This is called

3:01

redlining. It's illegal now, but it

3:03

still affects black buying power. You're

3:06

denied a loan because of redlining.

3:09

Now you don't have the assets to pass

3:11

to a future generation, whereas

3:13

say whites dead. And

3:15

if white people already own their homes,

3:18

their descendants benefit, says Orfeh

3:20

D'Vungie, a senior economist at Zillow.

3:22

First on buyers are getting help from

3:24

what we call the bank of mom

3:26

and dad. And so people without that

3:28

help are faced with having to save

3:30

longer to come up with the funds

3:32

necessary for down payment in today's environment.

3:35

And a higher down payment makes it easier to qualify

3:37

for a mortgage. There are some

3:39

government programs that assist with down payments.

3:42

And D'Vungie is also advocating for credit

3:44

scores to consistently factor in more data.

3:47

Rent, phone bill, utility payments, all of

3:49

those should count towards your credit so

3:52

that people who may not have access

3:54

to banking can still have a credit

3:56

history. And when they're ready, become

3:58

homeowners. country's population

4:00

grows increasingly diverse, Michael Neill of

4:02

the Urban Institute sees two consequences

4:05

to not addressing the disparity. Number

4:08

one, you know, massive inequality.

4:11

Number two, in my mind, challenges

4:13

for the industry in terms of how

4:15

they're going to, you know, drive revenue.

4:18

So he says there's a business case

4:20

as well as a social one to

4:22

helping more black borrowers become black homeowners.

4:25

I'm Stephanie Hughes for Marketplace. Wall

4:27

Street was closed today in observance of Juneteenth,

4:30

but do not worry, we'll have some more

4:32

details when we do the numbers. Retail

4:58

sales numbers came in

5:01

a bit lower

5:03

than expected yesterday.

5:13

Consumer spending inched up just a 10th of

5:15

a percent from April to

5:17

May. Another sign that consumers

5:20

are starting to feel the strain of

5:22

sustained higher prices. Many

5:24

of them though have been keeping up their

5:26

shopping habits by relying on credit cards, maybe

5:29

just a little too much. Economists

5:31

have been warning for months now about the

5:33

rise in credit card delinquencies. But

5:36

as Marketplace's Kimberly Adams reports, those

5:38

numbers, of course, need some context. Credit

5:41

card delinquencies are up year

5:43

over year, says Silvio Tavares,

5:45

president and CEO of credit

5:47

scoring company VantageScore. But if

5:49

you look at it month to

5:52

month, credit card delinquencies have actually

5:54

been improving through March, April and

5:56

a little bit through May. the

6:00

average credit score by his

6:02

company's rankings is pretty decent,

6:04

702. But that hides

6:06

a bifurcated market, two different

6:09

Americas. Wealthier consumers are paying

6:11

off cards and paying down

6:13

debt, boosting their scores. But

6:16

that lower consumer is increasingly

6:18

falling behind on their credit

6:20

balances. And that's really where

6:22

we're seeing the localization of

6:24

the increased delinquencies. That lines

6:26

up with data from WalletHub, which found that the

6:28

$1.26 trillion in

6:31

total credit card debt is down 14% from

6:33

its 2007 peak. But average debt per household

6:39

is still well over $10,000. That's a substantial part

6:41

of people's incomes. Cassandra

6:47

Happy is a WalletHub analyst.

6:49

So while we're seeing this

6:51

increase in spending, and it's

6:53

helping some factors within the

6:55

economy, a lot of people

6:57

are taking on debt in

6:59

order to help fuel the

7:01

spending and the economy. That's

7:03

already showing up in some early

7:05

indicators. Matt Layton is a senior

7:07

vice president at prepaid legal services

7:10

company Legal Shield. He says

7:12

they analyzed the roughly 150,000 calls

7:15

they get every month. And these days,

7:18

a larger percentage of those are

7:20

coming from questions about how do

7:22

I pay my bill? How

7:24

do I deal with the bankruptcy?

7:26

We're seeing each of those increase

7:29

each month. The company

7:31

minds that data to create

7:33

its Legal Shield Consumer Stress

7:35

Index and found, for example,

7:37

a 13% increase this year

7:39

in people calling about collections.

7:42

In New York, I'm Kimberly Adams for Marketplace.

7:49

For more economic context, be sure to listen

7:51

to David Brancaccio and our Morning Report team

7:54

to get you ready for your economic day.

7:57

Give it a listen. Kimberly

8:03

was just talking

8:06

about the

8:09

way that consumers

8:11

are spending. But

8:30

now a look at where they might be spending. Philip

8:33

Rollins is one of our retail regulars.

8:35

He runs the record and comic store

8:37

Offbeat over in Jackson, Mississippi. So

8:40

we decided to give him a call to see how things

8:42

are going. Business? Well, okay.

8:44

So we're back in our, what I like

8:46

to call the summer slump because

8:48

people are traveling or out of town, or it's

8:50

just too hot to go outside and visit a

8:52

comic book or record store. So

8:56

I'm trying to maneuver around that. Thankfully, I

8:58

do have regulars, people that come in

9:00

weekly to get their weekly comics and

9:03

stuff. So that's a big income source

9:05

that's really been helping out this

9:07

year so far. The

9:14

city, downtown Jackson, just started implementing

9:16

a new parking meter

9:18

system. Because the old part of giving you a

9:20

system for all jammed up or just outdated. So

9:22

we have like a digital kiosk at each street

9:25

and you have to pay with your phone, or whatever,

9:28

but it's like a dollar an hour. But

9:30

people are complaining about a dollar an

9:32

hour. So that's that. But thankfully, most

9:34

of my customers come on the weekend

9:37

anyway. I do have regular that come during

9:39

the week, but they don't mind paying like a dollar, park

9:42

it in and get right back out.

9:47

The move from our regular customers, they're kind

9:49

of content, honestly. This is what a lot

9:51

of people call their third space, which is

9:54

away from home and work that

9:56

you're comfortable in. And they come

9:58

here and they're getting. a record

10:00

reissue that they've been waiting on, or a new

10:02

comic or a new issue that's been read last

10:04

month so you were waiting on this month. So

10:07

a lot of people here, they're kind of content.

10:10

They're like, yeah, summer's hot. My

10:12

kids, you know, annoying me, but I got my comics and I'm

10:15

bringing my kid here, trying to get them to read more. This

10:20

store was started because I was part of

10:22

the Mississippi Black Leadership Institute. And

10:24

at the end of the institute, we had to come up with

10:26

a project that affects the community. And

10:30

all my peers ran for office or were doctors

10:32

or open up a practice or

10:34

something. And my idea for community was always

10:36

comic shop and record stores. And so

10:38

it's kind of always been a third space. I

10:41

just, you know, the term is so new to me.

10:43

So it's just, you know, have, I guess, a definition

10:45

for it. Instead of like,

10:47

I guess, community meeting ground or just, you

10:50

know, stuff like that. I would say

10:52

my biggest challenge right now

10:54

is just keep momentum

11:00

going, steady traffic coming in. The

11:02

parking issue and the streets,

11:04

the construction is

11:07

scaring people off. So I'm constantly

11:09

online like, hey, this is how you park. It's where

11:11

you park and finding

11:14

time honestly to rest. And

11:17

that's been a kind of a challenge. I've

11:19

been actively trying to like, just

11:23

do more outside of the shop. I'm walking at

11:25

least a mile when I get home

11:27

and working out in the morning and

11:30

trying to motivate myself to do that. Over

11:33

the next month, I would hope to see more people,

11:36

you know, of course, discover the shop. I'll

11:39

be meeting with a coalition that I'm part of,

11:42

Black owned record stores called FAMS. I'll

11:44

be linking up with them back in

11:46

the July when we go

11:48

to summer camp. It's

11:50

like a retreat for all independent record stores.

11:53

And that'll be my first like real

11:56

break, honestly. The store will

11:58

be closed for like a week and I'll be... down

12:00

in New Orleans so people will

12:02

be upset or sad but I'm just like I need

12:04

a I need a breather. That

12:12

was Phillip Rollins looking forward to a

12:14

break from running offbeat in

12:16

Jackson, Mississippi. Coming

12:31

up, the Taylor

12:33

Swift concert just

12:37

came out on

12:40

Disney Plus. This doesn't

12:44

compare to it. This

12:53

is so much better than watching it at home. A

12:55

workout class that doubles as a Taylor Swift

12:58

concert. Yeah, okay, I'll try it.

13:00

But first, let's do the numbers. US

13:04

markets are closed today for the federal holiday so why

13:06

don't we take a look at some other numbers. Stephanie

13:09

Hughes was just telling us about black

13:11

homeownership. If you take a

13:14

look at housing stats since the start

13:16

of the year, you'll see home prices across

13:18

the country continue to go up. That's

13:20

according to the S&P CoreLogic Case Shiller

13:22

composite. Prices are up nearly 1.9% since

13:24

the start of the year. If you're in

13:26

San Diego, New York or Cleveland, you're

13:28

especially seeing those prices go up. According

13:31

to Redfin, the top five states that home

13:33

buyers were looking to move to over

13:35

the past year were Florida, North

13:37

Carolina, Arizona, South Carolina and Tennessee. The

13:39

top five states home buyers search to

13:42

move away from California,

13:44

New York, Illinois, Washington

13:46

and Massachusetts. Meanwhile,

13:48

mortgage rates are still stubbornly high and

13:50

make any move challenging for home buyers.

13:53

The rate for a 30-year fixed mortgage is now

13:56

just under 7%. That rate

13:58

has hovered around 6.5%. half

14:00

to almost seven and a quarter since

14:02

January. Since today is Juneteenth,

14:05

some numbers about the federal holiday, which celebrates

14:07

the end of slavery in this country, all

14:10

50 states have recognized Juneteenth as

14:13

a holiday or observance. But

14:15

of those, 28 states and the

14:17

District of Columbia now observe it as

14:19

a permanent paid or legal holiday.

14:22

You're listening to Marketplace. Marketplace

14:24

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slash marketplace. This

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is Marketplace. I'm Rima Reis. So

17:28

I host a Marketplace show called This is

17:30

Uncomfortable. It's a podcast where I talk with

17:32

people about their relationship with money, how it

17:35

complicates their lives. And more

17:37

than four years ago during the very first

17:39

season, I talked with this

17:41

one couple, Mandy Coohy and Zach Aiman.

17:43

They were dating at the time and they

17:46

had this big misunderstanding where

17:48

they kept giving each other these extravagant

17:50

expensive gifts that neither of them

17:52

really wanted. They ended up in a

17:54

gift giving arms race that eventually came to an

17:57

end once they, you know, actually talked about it.

18:00

I was curious how Mandy and Zach are

18:02

doing today, more than four years later. If

18:04

there have been any changes in their spending habits

18:07

and communication around money. So I

18:09

called them up, and first, they had some

18:11

news to share. What

18:14

haven't we been up to? We got married. Zach

18:19

and Mandy, who are in their early 30s, got

18:22

married last year, then settled down near

18:24

Washington, DC. Well, have things

18:26

changed at all since we last talked? Are you all both

18:28

still kind of meh when it comes to gift giving?

18:31

How are y'all feeling? I think

18:33

the amount of gift giving that

18:35

we have attempted to do has decreased

18:37

just because we know that that's not each

18:40

other's love language anymore. Yeah. We

18:42

kind of talk, hey, in terms of

18:44

like gifts and how you want to

18:46

be loved and celebrated this year, what

18:49

do you prefer? Do you want

18:51

something thoughtful, slash sentimental, something practical

18:53

or something fun? So

18:56

they're on the same page now about gifts, but

18:58

they still have different philosophies around money. Zach

19:01

is a bit more frugal, which he attributes to

19:03

growing up in a low-income household, while

19:06

Mandy is more of a spender. Those

19:08

differences have come up a lot recently as they've

19:10

been talking about buying a house. I

19:13

would like more space in the kitchen. I

19:15

want to be able to grow some herbs. I would love

19:17

a little garden. I want a patio. I want to sit

19:19

outside and feel the sun on my face. For

19:22

me, buying a house is more than just like

19:24

making it an asset, not having to pay

19:27

rent, but I know that Zach's

19:29

brain works differently than mine.

19:31

Like analytic. Spreadsheets are coming out. Yeah, the

19:33

spreadsheets. Formulas are being. Oh my God, the

19:35

spreadsheets came out. I'm like,

19:38

okay, I get it. Cool, but like, how

19:40

are we going to pay for it? Exactly. So when I was

19:42

presenting the information to him as to like why I

19:45

think we need to purchase a house, I

19:47

was like, okay, let's talk about the

19:49

numbers. Let's talk about the monthly payments.

19:51

Let's talk about percentages and interest and

19:54

savings and all these very boring, dry

19:56

topics. Then once he's on board

19:58

and he's like, okay, I hear you. hear you

20:00

now, I'm following, then I can

20:02

sprinkle in the like, but I

20:05

really just want to frickin patio.

20:08

And I think I've learned that right?

20:10

Tailoring the conversation to how his brain

20:12

works and being patient with that. Exactly.

20:15

For springing all of your thoughts and

20:17

feelings. I think part of it

20:19

is also knowing their communication

20:21

style and not expecting them to

20:23

like react and respond in the

20:25

ways that you would react and

20:27

respond. So I think that's

20:29

been really helpful for us is knowing

20:32

how the other person receives

20:34

love receives affection receives, you

20:37

know, financial information is really

20:39

helpful because then you have a more productive conversation

20:42

than just being like, I want

20:44

a patio and a basil garden. Why can't you

20:46

just accept me for who I am? Because then

20:48

he's like, right, but how much

20:50

is the basil garden gonna cost me per

20:52

month? Right? Do we need that garden? No.

20:54

Yeah, the answer is it's not necessary, but

20:56

it will bring us joy. Yeah.

21:00

Since we last talked, have you all

21:02

made any new observations about your relationship

21:04

with money, either as individuals or as

21:06

a couple? I'm

21:09

not gonna say that one of us has completely changed

21:12

their their view of life. But

21:15

I think a lot of the success that we

21:17

have now is we

21:20

built up that trust within each other to be

21:23

able to come and have conversations of saying

21:25

like, you know, man, I can say I

21:27

know you don't like spending money. However, we

21:30

should look at doing this, you know,

21:32

before, whereas I might have been

21:34

saying like, Oh, we don't need to do

21:37

that. Now it's more of a if we're gonna do

21:39

it, then here's some of the things that we

21:42

need to be focused on for the next, you

21:44

know, three, four, six months. Until we get

21:46

to that point. Let's put our

21:48

heads together. And it's me and you versus figure

21:50

solving this math problem. Yeah, it is a math

21:52

problem at the end of the day. Yeah,

21:55

I think I think Zach is completely right. We

21:57

always kind of look at it as to

26:00

pivot and attempt to really

26:02

monetize music catalogs. She works

26:04

with musicians and fitness businesses

26:06

on licensing. With music

26:09

labels taking in less money from

26:11

streaming, she says they're getting creative

26:13

about generating new revenue streams. They

26:15

have music catalogs and so they're trying to figure

26:17

out smart ways to license them. So going to

26:19

a gym and saying, all right, cool, we're giving

26:21

you a license for a year or 10 years,

26:25

it gives you an opportunity to come back after that 10

26:27

years and do a new deal. Goldman Sachs

26:29

estimates in 2022 Peloton paid $267 million to

26:31

the recorded music industry. That's

26:38

more than TikTok, YouTube or Instagram.

26:41

Earlier this year, TikTok failed to

26:43

reach a new licensing agreement with

26:45

Universal Music, which resulted in millions

26:47

of songs being muted. Delgado

26:49

says that shows labels are willing to

26:51

play hardball. That was just an

26:53

example of them saying, OK, we're not going to do this because

26:55

we just get paid more elsewhere. Songs aside,

26:58

there could be even more opportunities for

27:00

labels to make money digitally from fitness

27:02

classes. Personal trainer Megan Vandebars

27:04

is open to the idea of exercising

27:06

with big stars in the metaverse. If

27:09

there is a way where we virtually

27:11

are all working out together next to

27:13

Taylor Swift, I definitely see that being

27:16

in the future. Attorney

27:18

Chrisl Delgado thinks more immersive experiences

27:20

will be coming soon. Maybe

27:23

you're wearing a headset, but maybe we have these

27:25

mini spheres at some point that you're in, kind

27:28

of like a 3D kind of experience. I can

27:30

see us going there. She warns

27:32

that will mean more complicated licensing deals and fitness

27:34

brands will have to pay more money for it.

27:38

In Toronto, I'm the BBC's Megan Lawson

27:40

for Marketplace. The

27:42

The The The The

27:44

The The The The The

27:47

The The This

27:50

final note on the way out today,

27:52

we talked earlier about states that recognize

27:54

Juneteenth as a paid or legal holiday

27:57

to follow up on that. I saw an article in

27:59

Axios that gives