Realtor.com finds

LGBTQ+ Buyers Spend More Of Their Income To Own A Home

Data shows that LGBTQ+ buyers more likely to put smaller down payments on a home

BY STAFF REPORT, NATIONAL MORTGAGE PROFESSIONAL NEWS

According to new survey data from Realtor.com, recent LGBTQ+ and BIPOC (Black, Indigenous, and people of color) buyers are going into homeownership weighed down and more burdened by housing costs than white and non-LGBTQ+ individuals.

Lower down payment, higher sales price, and loan denials creates a cost crunch for communities challenged by lower incomes

Realtor.com’s data shows that LGBTQ+ and BIPOC buyers are more likely to put smaller down payments on a home, with nearly two-thirds (65%) putting down 20% or less of a home’s purchase price when buying compared to about half (53%) of white, non-LGBTQ+ buyers. LGBTQ+ and BIPOC buyers were also nearly 9% more likely to pay over a home’s asking price to get their offer accepted — 86% paid over asking compared to 79% of white and non-LGBTQ+ individuals.

A smaller down payment on top of an above-asking home price generally equates to a higher interest rate and monthly mortgage payment, and that means LGBTQ+ and BIPOC buyers are likely to pay a larger share of their income toward housing than other buyers. That’s especially challenging for budgets, as a higher percentage of LGBTQ+ and BIPOC homebuyers were also more likely to fall into lower income groups than white and non-LGBTQ+ buyers.

Realtor.com also found that LGBTQ+ and BIPOC buyers face challenges during the mortgage process, and are 1.7 times more likely to have been denied mortgages two or more times.

“More Americans than ever before are stretched thin because of the growing housing cost burden, but our data shows that LGBTQ+ and BIPOC buyers are potentially spending even more of their income to own a home of their own, which can make it difficult to afford other essentials like food and transportation and creates even greater inequalities,” said Laura Eddy, Realtor.com vice president, research and insights.

“With the rising costs of homeownership taking a greater toll on budgets, resources like down payment assistance can help reduce the overall financial burden of buying a home and make it more accessible to a wider range of individuals,” she added. n to the LGBTQ+ community, he stresses the importance of recognizing that many programs are designed for nuclear families.

“I think that when working with an underserved community, it’s important to help them explore options that best fit their needs. But it also involves approaching them with understanding,” he said. “It also involves helping them be educated about extra steps that they can take to protect themselves in their homebuying process.”

The Need For Inclusivity

Dort also recognizes that the mortgage industry is “a white male, cis-gendered industry” that doesn’t represent the true diversity of a typical customer base. “The point of Pride Lending is that we look like and represent what our customers identify as,” Dort explained.

Even though Pride Lending is based in one of the most flamboyant cities in the United States, Dort describes Nevada as a “purple” state, meaning that while the state has some progressive laws to protect LGBTQ+ people, some of the state’s politics lean right. “A plus is that Nevada has more protections for LGBTQ+ people than other states do,” he said. “While they’re not as progressive as California or Colorado, I have found in my personal experience that Vegas is relatively accepting.”

Dort himself is licensed in not just Nevada. He also services Colorado and Tennessee. He says that the goal is to expand Pride’s licensing into Florida, Oklahoma, Kansas, Utah, Alabama, California, and Georgia, among others. “These are states that we’re seeing a need in,” he explained. “While California is a pretty accepting state overall, there are still some areas where it’s not so accepting. The rest of the states have some regressive stances on laws that we [as a company] are concerned about.”

Dort knows this firsthand. He was born in Arkansas and went to middle and high school in Kansas. “There’s good and bad in every state. For me, at that time in my life when I wasn’t out yet, Kansas was incredibly Catholic. It wasn’t until I moved away that I was able to accept myself and come out and see other lifestyles,” he said.

Beyond The Mortgage

Not all is fun or straightforward when it comes to advocating for LGBTQ+ clients. Boyer says that oftentimes, loan officers aren’t taking into account the complexities of the legal system when working with clients in the LGBTQ+ community. “One of the areas that I specialize in is title elements,” Boyer said. “If there was ever a judgment that overturned same-sex marriage, those who took titles subject to being married could have that title invalidated and their ties to a property invalidated.”

Boyer says that title is more than surface level. He explained that when couples aren’t legally married, each person is a separate, legal entity and if anything were to happen to one of the persons, the inheritance would go automatically to blood family members as legal “next of kin.” “That’s obviously not what a lot of people intend when they buy a house with a partner and loved one,” he said. “Oftentimes this happens to same-sex couples. I usually recommend clients take title as ‘Not as Tenants in Common, but with Rights of Survivorship’ since it is not something that can be challenged by other legal next of kin.”

Boyer says that death and money often bring out the worst in people, which is especially important to keep in mind when a same-sex couple is buying a home. “For a lot of people, I don’t think it can be understated how much of an emotional process [buying a home] is, especially if the relationship isn’t recognized,” Boyer said. “And that alone discourages many from becoming homeowners.” n https://nationalmortgageprofessional.com/podcasts/gated-communities/lend-pride