What’s Keeping LGBT Homeownership Rates Low?

The historic Obergefell v. Hodges Supreme Court decision in June 2015 that legalized same-sex marriages has gone a long way in helping the lesbian, gay, bisexual, and transgender (LGBT) community toward a broader recognition and legal assurance of their rights. Despite this, however, LGBT homeownership remains 16% below the national average according to a report by the National Association of Gay & Lesbian Real Estate Professionals (NAGLREP) that was published in partnership with Freddie Mac.

According to this report, one of the biggest barriers to homeownership for the LGBT renter is not unlike that faced by most homebuyers—saving up for a down payment. Seventy percent of LGBT individuals surveyed by Freddie Mac listed this as a top challenge, whereas 81% of NAGLREP members cited lack of funds for a down payment and waiting for the right time to buy as the top hurdles keeping this demographic from owning a home.

However, the community not only fears discrimination within the communities/neighborhoods where they may choose to buy, they also worry their mortgage might not be approved or their offer on a home might get rejected. The report indicated that, while 44% of those surveyed cited anxiety about how welcoming community and neighbors might be as a concern, 20% and 22% said that they feared their mortgage would not be accepted or that their offer might get rejected, respectively.

These fears might not be unfounded. The Washington Post recently reported that Gay couples were 73% more likely to be denied a mortgage than heterosexual couples with the same financial worthiness. Citing a study by the Ivy College of Business at the Iowa State University, the report said that when same-sex couples were approved for a loan, they paid 0.2% more in interest and fees.

Despite these concerns, the NAGLREP report said that the future for homeownership for the LGBT community is bright, especially with the reintroduction of the Equality Act in Congress in March. This bill would amend the Civil Rights Act of 1964 to prohibit discrimination on the basis of sexual orientation and gender identity in employment, public accommodations, public education, federal funding, credit, the jury system, and housing. If the Equality Act ultimately passes, it will pave the way for a future where LGBT individuals are protected from discrimination.

In fact, this bill was a key point of discussion at the four LGBT town halls conducted by the American Mortgage Diversity Council (AMDC) in 2018. This series of AMDC Town Halls culminated in the creation of a white paper report that was circulated to thought leaders across the country, including mortgage industry leaders, housing policy experts, and participating LGBT organizations.

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