People all over the United States are dealing with rising monthly rents. LGBTQ+ renters are no exceptions. And, like all renters, they face the hurdle of gathering together down payments that come along with today’s sky-high listing prices.
But while we’re all affected by this harsh economy of housing, it is somewhat harder for the LGBTQ+ group than it is for everyone else. According to UCLA Law School’s Williams Institute, LGBTQ people (whether singles or couples) are less likely to hold deeds to their own homes.
And a new report on this issue, The LGBTQ+ Journey to Homeownership, says members of the LGBTQ+ community don’t have deeds to their homes until later in life than their straight peers.
What’s Impacting the Community, and Why?
For one thing, more people in the younger generations are openly LGBT. Younger buyers are at a disadvantage as they have student debt burdens, and simply because so many are first-time buyers and have a shorter credit history. This also helps to explain why LGBT buyers wind up paying more for home loans. LGBTQIA borrowers pay lenders some $86 million more annually for mortgages, according to an Iowa State University study.
Location can also be a reason for the difference in numbers. Many LGBTQ+ home buyers would be buying in big cities. It can get pretty expensive to live in a welcoming community with support systems and cultural draws, as Zillow research shows.
☛ This too shall pass? Prices are starting to come down in some cities. And on the horizon, technology will open more opportunities for first-time buyers.
And of course a major tailwind for LGBTQIA homeownership is the Supreme Court’s 2015 holding that made same-sex marriage a legal option nationwide. The holding visibly nudged the statistics in an inclusive direction. This is because relationships and marriages drive homeownership.
There’s No Place for Discrimination In Real Estate.
Home transactions might be private, but they still have to follow anti-discrimination rules.
If someone doesn’t like someone else’s gender, gender identity, or sexual orientation, and engages in housing discrimination, they’ve broken the law. The Department of Housing and Urban Development (HUD) backs the law up. Underwriters for federally insured mortgage lending institutions must approve same-sex couples for loans if their finances are sound. So must private lenders and underwriters involved with the USDA loans or Veterans Administration mortgages.
What about agents? The National Association of Realtors® Code of Ethics (Article 10) bars member agents from treating anyone unfairly because of their sexual orientation or their gender identity.
But it helps if the industry is proactively welcoming, too. That’s why some industry players make a point of reaching out to the community. Take Keller Williams, with its KW Rainbow Network. In collaboration with the National Association of Realtors®, the Rainbow Network exists to “advocate for the rights of the LGBTQ Community as it relates to housing and discriminations laws.” To achieve this, KW builds networks of allies to work with local lawmakers and community leaders across the country on fair and inclusive rules and laws.
What Vesting Language Goes on the Title?
When couples buy homes, vesting language sets the home into an estate plan. Vesting options are:
Joint Tenancy with Rights of Survivorship (JTWROS): Co-owners, married or not, own the property in equal shares. If one of them dies while they own the home, the surviving partner owns the entire property.
Tenants in Common: Co-owners, married or not, own the property in equal or unequal percentages. Here’s what’s unique: They may each transfer or will their individual interests to anyone they choose (including to each other), as each sees fit. If one partner dies, the interest of the deceased goes to the beneficiary named in the will or transfer on death deed.
Community Property: In community property states like California, the couple jointly owns assets and debt taken on during the marriage or life partnership. They can, if they wish, decide to specify that their home is community property with a right of survivorship. In the case of the death of one of the owners, the survivor gets the tax benefit of a stepped-up cost basis for the home.
☛ Individuals — whether gay or straight, married or not — need legal and financial advisers to provide counsel on case-specific points of home owning, and ensure that the parties protect their personal interests if the couple breaks up.
Tenancy by the Entirety (TBE): Couples in some states, including same-sex marriage partners, and possibly domestic partners, may hold their title as tenants by the entirety. Although no one can avoid taxes by vesting as TBE, this vesting form does shield each co-owner from the other owner’s creditors (unless, of course, the debt is co-signed). TBE includes the right of survivorship. The TBE title will go into probate only after both parties have died. Do you have questions about whether the TBE title language is appropriate for you? If so, consult an attorney in the state who has experience with LGBT clientele.
☛ To this day, some state laws rely on the phrase “husband and wife” for life partners’ titles. And yet the language of deeds, increasingly, can be synchronized with a homeowners’ gender identity. Slowly but surely, real estate is coming along.
Sole and Separate Property: A home titled in one name and vested as sole and separate property belongs to one of the life partners, not both. One person alone may legally have sole ownership of property bought from that one person’s separate bank account, that was willed specifically to you, or that was already yours before you became a couple. Both partners may live in the home. But all financial activities regarding the home must be kept separately. If a home is bought as sole and separate property by one of the life partners, the other party might need to sign a quitclaim deed.
Everyone’s Entitled.
Same-sex couples have had equal rights in the United States for less than a decade. Those rights continue to be embroiled in political battles. Yet the general population’s support for same-sex couples stands firm. Wide public understanding and support in the face of political tension will help the LGBTQ community be resilient in a time of political headwinds.
As we’ve seen, the position of real estate professionals is clear. No ifs, ands, or buts. When it comes to owning a place to live, everyone’s entitled.
Supporting References
National Association of Realtors®: Being an Agent – LGBTQ Buyers and Sellers.
LGBTQ+ Real Estate Alliance Inc., The LGBTQ+ Journey to Homeownership (May 10, 2023).
LGBTQ+ Real Estate Alliance Inc., Despite Assistance, LGBTQ First-Time Homebuyers Lag Behind (May 19, 2023).
Jesse Pound for CNBC.com: “I Just Can’t Win in This Market – Why LGBTQ Homebuyers Say Mortgage Rates Are Hitting Them Especially Hard (Jun. 19, 2022).
Gen Z and Millennials are scrimping. Boomers? Living it up By Matt Egan, CNN Business (Jun. 12, 2023).
Deeds.com: LGBT+ and Real Estate Ownership – Navigating Mortgages, Titles and Deeds (Aug. 24, 2020).
David McMillin for Bankrate.com: LGBT Homebuyers, Know Your Rights. LGBT Mortgage Lending Bias – Homebuyer Statistics (Jun. 5, 2023; citing an Iowa State University study).
And as linked. Photo credits: Rosemary Ketchum and Kampus Production, via Pexels.