Homebuyers have been struck by expensive house prices since the covid-19 pandemic had its first let up in July 2020, especially in the last year. The year-on-year price increase is more than 18 percent, pricing out many people from getting into the housing market.
One group that has been disproportionately affected has been the LGBTQ+ community. This is due to a confluence of factors, but with such an expensive market a big problem has been acquiring the capital to pay for their first house.
What has happened with mortgage prices in 2022?
The 30-year fixed-rate mortgage averaged 5.78 percent as of 16 June, the highest it’s been since 2008. Although homebuyers are feeling the pinch, rates had been historically low since the pandemic at just 2.93 percent a year ago.
The reason for the increase in mortgage rates is mostly due to interest rate hikes by the Federal Reserve. Policymakers have been steadily increasing interest rates in an effort to drive down inflation. The latest rate rise, implemented 15 June, was a 75-basis point jump; the fastest rate hike since 1994. With inflation still very high and lending rates elevated, this means bad news for those hoping to see lower mortgage rates any time soon, as well as those who’s jobs could be threatened by the forced slowing of the economy.
Why are LGBTQ people struggling more than others?
With house prices so high, the people in an advantageous position are those who are already on the property ladder and can sell their old property. In relation to this statistic, 70 percent of non-LGBTQ+ adults abd 75 percent of non-LGBTQ+ couples own a property. However, for LGBTQ+ groups, these numbers are 50 and 64 percent respectively, in data aquired by the Williams Institute at the UCLA School of Law.
There is plenty of evidence that the reasoning behind this discrepancy is due to discrimination. Data from 1990 to 2015 found LQBTQ+ applicants were 73 percent more likely to be denied a loan versus heterosexual couples, according to the NAGLREP 2020-2021 report. Young LGBTQ people are also more liekly to be homeless at a young age compared to their peers, making homeownership a distant dream.
“I do think it is an unfortunate reality that we are probably going to be disproportionately impacted by higher costs, if not prohibited from purchasing all together,” Ryan Weyandt, the CEO of the LGBTQ+ Real Estate Alliance said.
And with further rate hikes expected, purchasing a house will prove to be more difficult as the year continues.