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Why LGBTQ homebuyers say rising mortgage rates are hitting them hard

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Skandar Mad, shown here during a vacation in Italy, is looking for a home in the Los Angeles area.

When Skandar Mrad decided to buy his first home at the end of last year, his top priority was location.

Mad, a gay man living in the Los Angeles area, spent most of his adulthood commuting to work on NASA’s jets for several hours a day.rPromotion Institute in Pasadena, California. When he found an apartment close to his job, he realized that his life had improved significantly.

“The commute only tore me. I saw it worsening, both mentally and physically,” Murad said.

However, his roommate moved and 40-year-old Murad decided it was time to become a homeowner. He originally wanted to live within five miles of his job, but soon realized that it might not be feasible in a competitive market.

“It was very strange to see a line outside the open house waiting for admission. I couldn’t believe there was so much demand …. what am I crazy about? I didn’t know, “Mrad said.

He began looking for a home earlier this year, and its five-mile radius quickly expanded to 30 miles. At the same time, the Federal Reserve began raising its benchmark interest rates, causing mortgage rates to skyrocket. According to Freddie Mac, 30-year fixed-rate mortgages jumped to 5.78% in the week of June 16th, the largest week-long jump since 1987.

It has brought about a rapid change in what Murad may have to pay. Looking at small single-family homes and condominiums, Madd said he saw potential monthly payments for similar properties increase by more than $ 500 a month since the search process began.

Despite these high rates, the competition was fierce. In May, Murd said he had bid over $ 600,000 on properties listed for $ 575,000. After that, the winning bid was $ 650,000.

“I can’t win in this market. There’s no way,” Madr said.

Numbers

Mrad’s frustration has been shared by many future homebuyers across the country over the past two years. House prices have skyrocketed since 2020 as inspiration from Congress and the Federal Reserve Board coincided with the telecommuting boom.

This sharp rise in home costs has a particular impact on the LGBTQ community, which is unlikely to own a home. First-time homebuyers need to pay a higher price without being boosted by the value of selling their existing real estate.

according to Williams Institute at UCLA Law School, 50% of LGBTQ adults and 64% of LGBTQ couples own their own homes. For non-LGBTQ groups, these numbers are 70% and 75%.

Historical data on home ownership by sexuality has not been tracked by the Census Bureau, but according to a study by the LGBTQ + Real Estate Alliance, since the Supreme Court legalized same-sex marriage in 2015, couples and singles in the community The number of homeowners is increasing. ..Jiro report In 2021, LGBT people accounted for 12% of homebuyers, up from 7% in 2019.

Some real estate companies, such as Keller Williams’ KW Rainbow Network, have launched initiatives to support this growing group in the home buying process.

Ryan Weyandt, CEO of the Alliance, said: Joe Biden’s That presidential order Provides broader protection Opposition to discrimination based on gender identity and sexual orientation also increases buyer confidence. However, he added that the current home ownership gap puts the community at a disadvantage.

“I think it’s a shame that we’ll probably be disproportionately affected by higher costs, even if we’re not forbidden to buy together,” Weyandt said.

President Joe Biden signed an executive order in the Oval Office of the White House in Washington on January 20, 2021, after becoming the 46th President of the United States.

Tom Brenner | Reuters

Discrimination can also prevent LGBTQ people from becoming homeowners, whether during the sales process or long ago. According to a study, LGBTQ people are more likely to experience homelessness among young people, according to the Williams Institute.

Housing instability and other forms of discrimination can lead LGBTQ people to lag behind financially and at school, further increasing their rise to home ownership.

“This is an ugly connected domino line that starts at the age of 15-16 and affects your ability to own a home in your thirties,” Weyandt said.

Locations also serve as a barrier to community homebuyers. Survey from Zillow LGBTQ homeowners are more likely to live in urban areas than their cisgender peers, and homes in areas that explicitly offer non-discrimination protection can be $ 127,000 higher. is showing.

Christopher Hook, a 23-year-old music producer in Orlando, said he went to buy a home in the Los Angeles area with a friend after growing up as a religious person in central New York and Florida. More receiving area.

“I couldn’t get involved with most of the community. I always felt lonely. It was” Oh, I have that gay kid. ” They all knew me as a “gay kid.” “… I don’t think it’s my responsibility to put up with it in my future life.”

What’s next

On Wednesday, the Federal Reserve Signs for more rate hikes in 2022This could further weaken demand.

Mr Murad offered to wait for a while for the market to cool, but said her home was too far from his job.

“I visited my mother after work, and it’s a minimum of two hours drive,” he said. “And even a single drive to her, I get there and sit on the couch. I’m exhausted, angry on the road, and have no energy to do anything. Everyday.”

Mr. Mrad said he is considering using his retirement savings to strengthen his purchasing power or working with his sister to buy a duplex. Meanwhile, the potential cooldowns in the housing market have not yet been filtered into his daily search.

“I don’t know. I’ve seen the house. [recently] And there are still lines outside the people waiting to see the open house. If the data is national, it’s definitely not what you see in Los Angeles, so it’s distorted. ”

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