Why LGBTQ homebuyers say rising mortgage rates are hitting them hard

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

Mrad, a gay man living in the Los Angeles area, has spent much of his adult life commuting several hours a day to his job at the NASA jet propulsion lab in Pasadena, California. When he found an apartment closer to work, he noticed a major improvement in his life.

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

However, his roommates moved out, and Mrad, 40, decided it was time to become a homeowner. He originally wanted to live within five miles of his work, but quickly found that may not be realistic in a hyper-competitive market. 

“It was so strange for me to see a line of people outside an open house waiting to get in. I couldn’t believe there was that much of a demand. … I kind of didn’t know what I was getting myself into,” Mrad said. 

He began looking for homes early this year, and that five-mile radius soon expanded to 30 miles. At the same time, the Federal Reserve began hiking its benchmark interest rate, sending mortgage rates soaring. 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. 

That has led to rapid changes in what Mrad might have to pay. Mrad, who is looking at small single family homes and condos, said he has seen the potential monthly payments on similar properties rise by more than $500 a month since his search process began. 

Even with those higher rates, the competition has been fierce. In May, Mrad said he bid more than $600,000 for a property listed at $575,000. The winning bid then came in at $650,000.

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

Mrad’s frustrations are shared by many prospective home buyers across the country over the past two years. Home prices shot up, starting in 2020, as stimulus from Congress and the Federal Reserve coincided with a work-from-home boom. 

This rapid rise in the cost of a home is particularly impactful for the LGBTQ community, which is less likely to own a home. 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 the Williams Institute at the UCLA School of Law, 50% of LGBTQ adults and 64% of LGBTQ couples own their own homes. For non-LGBTQ groups, those numbers are 70% and 75%.

Historical data on home ownership rates by sexuality were not tracked by the Census Bureau, but surveys from the LGBTQ+ Real Estate Alliance suggests that home ownership for couples and singles in the community has been trending up since the Supreme Court legalized same-sex marriage in 2015. Zillow reported in 2021 that LGBT people accounted for 12% of homebuyers, up from 7% in 2019.

Some real estate firms have started initiatives to help this growing group with…