New research by Freddie Mac finds that members of the LGBT community are less likely to own a home even though members generally have a favorable view of ownership and a desire to buy.
The survey of LGBT community members living in the U.S. found that 49 percent of LGBT households are likely to own a home compared to the overall national homeownership rate of 64.3 percent.
The survey also explored diversity within the LGBT community. It found, for example, that gay men and lesbians were most likely to own (52 percent), while subsets of LGBT African-Americans (30 percent) and LGBT millennials (23 percent) were least likely to be homeowners.
Despite being less likely to own a home, LGBT respondents largely had positive attitudes about homeownership, similar to the level seen among renters in general. Three-quarters of LGBT renters agreed that owning is a good financial investment; 72 percent said they want to own a home in the future.
One of the primary reasons for the lower homeownership rate among the LGBT community may be a tendency to relocate more frequently: 67 percent said they do not live in the same area in which they grew up, which is higher than the general population.
“We fielded this survey to get a better understanding of the current challenges facing the LGBT community, as well as their current housing choices, preferences, experiences and aspirations,” says Danny Gardner, senior vice president of affordable lending and access to credit at Freddie Mac. “What we found was that several factors – including increased mobility, lower marriage (rates), a tendency to live in high-cost urban areas and fears of discrimination – may be contributing to these lower homeownership rates.”
LGBT renters fear discrimination and seek LGBT-friendly neighborhoods
More than four in 10 (46 percent) LGBT renters fear discrimination in the home buying process, while an additional 15 percent are unsure.
When deciding where to live, LGBT renters cited price, safety and a LGBT-friendly location as the most important factors. If they were to buy a home, a LGBT-friendly neighborhood was ranked only behind home price and safety as their top three priorities.
Affordability, downpayment misunderstandings slow homeownership
As seen with renters across all demographics, rising rents and home prices are slowing LGBT renters’ path to homeownership. One of biggest financial challenges for all potential homebuyers is saving for a downpayment, and seven in 10 LGBT renters interested in buying a home cite saving for a downpayment as a challenge.
Like the general population, over half of LGBT renters said they either didn’t know how much is needed for a downpayment, or thought it was above 20 percent.
“Unfortunately, the rising cost of renting and buying combined with misunderstandings about downpayments are slowing homeownership rates among the LGBT community even further,” says Gardner. “That is why as an industry – lenders, appraisers, agents, homebuilders and Freddie Mac – must understand LGBT housing needs, recognize their challenges and educate them on the buying process.”
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