Why LGBTQ homebuyers are saying that they can't win in the market: Why mortgage rates are hurting them particularly hard

Aug 10, 2022

Skandar Marad, seen here while on vacation in Italy and looking for a house in Los Angeles.

When Skandar Mrad decided late last year to buy his first house, his top priority was location.

Mrad, a gay male living in Los Angeles, has commuted for many hours to his job at NASA jet ropulsion Lab in Pasadena. He noticed a dramatic improvement in the quality of his life when he found a more convenient apartment.

"That commute just tore me apart. Mentally and physically, I saw that I was deteriorating," said Mrad.

Mrad, 40 years old, moved in with his roommates, and he decided that it was now time to become a homeowner. In a hyper-competitive market, Mrad initially wanted to live within five minutes of his work. However, this was not possible.

"It was so odd to see a long line of people waiting at an open door to get in. I couldn't believe there was that much of a demand. Mrad stated that... I didn't really know what I was getting into."

He began looking for homes early this year, and that five-mile radius soon expanded to 30 miles. The Federal Reserve increased its benchmark interest rate in the same period, sending mortgage rates skyrocketing. The 30-year fixed rate mortgage jumped to 5.78% the week of June 16, according to Freddie Mac, seeing its biggest one-week jump since 1987.

Mrad's monthly payments have seen rapid changes. Mrad is now looking at small single-family homes as well as condos. Since his search began, he's seen potential monthly payments on similar properties go up by more that $500 per month.

Even with those higher rates of competition, it has been fierce. Mrad stated that he bid more $600,000.00 for a property priced at $575,000. The winning bid came in at $650,000.

"I cannot win in this market. Mrad declared that there was no way.

These numbers

Mrad's frustrations have been shared by many potential homebuyers across the country in the last two years. The Federal Reserve and Congress provided stimulus to help homeowners. This was in conjunction with the rise of work-from-home.

This rapid rise in the cost to buy a home has a particular impact on the LGBTQ community. First-time homebuyers have to pay the higher prices without getting a boost from the value selling an existing property that they own.

According to UCLA School of Law's Williams Institute, half of LGBTQ people and 64% of LGBTQ couple own their home. These figures are different for non-LGBTQ persons. They range from 70% to 75%.

The Census Bureau does not have historical data about home ownership by sexuality. However, surveys by the LGBTQ+ Real Estate Alliance suggest that home ownership for singles and couples has been rising since 2015 when the Supreme Court allowed same-sex marriage. Zillow reports that LGBT homebuyers accounted for 12%, up from just 7% in 2019.

Some realty firms have begun initiatives to assist this growing population with the homebuying process. Keller Williams' KW Rainbow Network is one example.

Ryan Weyandt from the Alliance is the CEO. He said that President Joe Biden’s executive directive, which provides greater protections against discrimination because of gender identity and/or sexual orientation, has also raised confidence in buyers. But, he stated that the current home-ownership gap has placed the community in a disadvantage.

"I do think it is an unfortunate reality that we are probably going to be disproportionately impacted by higher costs, if not prohibited from purchasing all together," Weyandt said.

After being inaugurated as the 46th President of the United States of America, U.S. January 20, 2021. Joe Biden signs executive order in the Oval Office of the White House.

Tom Brenner

Related Posts