“Fears of discrimination may be contributing to these lower homeownership rates as well.”
Certain members of potential homebuyers may put off homeownership as a result of fears about discrimination. According to a new report from Freddie Mac, less than half of the LGBTQ population are likely to own a home—much lower than the national rate of 64.3 percent. This is despite a group consensus that owning is a good financial investment, and that they would like to own a home in the future.
Senior Vice President of Affordable Lending and Access to Credit at Freddie Mac, Danny Gardner, cited potential explanations. Increased mobility, lower marriage rates, and a tendency to live in high-cost urban areas are contributing factors to the trend. He added, “Fears of discrimination may be contributing to these lower homeownership rates as well.”
Identifying Fear Factors
According to respondents to the study, nearly half of all LGBTQ renters said they feared discrimination in the home-buying process. This contributes to delays in home-buying since these individuals consider more than price and crime rates when evaluating a purchase. Whether or not a neighborhood is likely to be safe and LGBTQ-friendly ranks among the highest importance.
Another factor in low LGBTQ homeownership may be that more than two-thirds live in a different area from which they grew up.
Affordability & Misunderstandings are Universal
While the LGBTQ community deals with additional concerns about homebuying, Freddie Mac’s data indicates the biggest roadblocks are common. Most respondents didn’t know how much money they would need for a down payment. Many believed the down payment would be higher than 20 percent of the purchase price. 70 percent said a down payment was their biggest challenge in homebuying.
“Homeownership counseling and awareness of the many low down payment programs available would likely go a long way in making the dream of homeownership a reality for many interested LGBTQ households,” wrote Freddie Mac analysts.