Skandar Mrad, here on vacation in Italy, is looking for a home in the Los Angeles area.
When Skandar Mrad decided to buy his first home late last year, 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 NASA Jet prightPropulsion Laboratory in Pasadena, California. When he found an apartment closer to work, he noticed a big improvement in his life.
“The commute just tore me apart. I saw myself deteriorating mentally and physically,” Mrad said.
However, his roommates moved out and Mrad, 40, decided it was time to become a homeowner. He initially wanted to live within five miles of his work, but quickly found that in a highly competitive market, that might not be realistic.
“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 such a big demand. … I kind of didn’t know what I was getting myself into,” Mrad said.
He began house-hunting earlier this year, and that five-mile radius soon expanded to 30 miles. At the same time, the Federal Reserve began raising its benchmark interest rate, causing mortgage rates to soar. The 30-year fixed-rate mortgage rose 5.78% for the week of June 16, according to Freddie Mac, making it the biggest one-week jump since 1987.
This has led to rapid changes in what Mrad may have to pay. Mrad, who looks at small single-family homes and condos, said he’s seen potential monthly payments for similar properties increase by more than $500 a month since he began his search process.
Even with these higher rates, the competition was fierce. In May, Mrad said he had bid more than $600,000 for a property listed at $575,000. The highest bid was $650,000.
“I can’t win in this market. There’s no way,” said Mrad.
Mrad’s frustration has been shared by many would-be home buyers across the country over the past two years. Home prices skyrocketed from 2020 as stimulus from Congress and the Federal Reserve coincided with a home office boom.
This rapid increase in the cost of owning a home is particularly impacting the LGBTQ community, who are less likely to own a home. First-time homebuyers have to pay the higher prices without realizing any appreciation in value by selling an existing property they own.
According to the Williams Institute at UCLA School of Law, 50% of LGBTQ adults and 64% of LGBTQ couples own their own homes. For non-LGBTQ groups, these numbers are 70% and 75%.
Historical data on homeownership rates by sex was not collected by the Census Bureau, but surveys by the LGBTQ+ Real Estate Alliance suggest home ownership for couples and singles has been trending in the community since the Supreme Court legalized same-sex marriage in 2015, according to Zillow reported in 2021 that LGBT people made up 12% of home buyers, up from 7% in 2019.
Some real estate companies have launched initiatives to help this growing group through the home buying process, such as Keller Williams’ KW Rainbow Network.
Allianz CEO Ryan Weyandt said President Joe Biden’s executive order, which provided broader protections against discrimination based on gender identity or sexual orientation, also boosted shopper confidence. But, he added, the current homeownership gap has disadvantaged the community.
“I think it’s an unfortunate reality that we’re likely to be disproportionately affected by higher costs, if not banned from buying all together,” Weyandt said.
President Joe Biden signs in the Oval Office of the White House in Washington after his inauguration as the 46th
Tom Brenner | Reuters
Discrimination, whether during the sales process or well before it, can also deter LGBTQ people from becoming homeowners. According to the Williams Institute, studies show that LGBTQ people are more likely to experience homelessness in their youth.
Housing instability and other forms of discrimination can leave LGBTQ people behind financially and academically, making the climb to homeownership even steeper.
“It’s an ugly series of dominoes that starts as early as age 15-16 and impacts your ability to own a home in your 30s,” Weyandt said.
Location can also serve as a barrier to homebuyers in the community. Research by Zillow shows that LGBTQ homeowners are more likely to live in urban areas than their cisgender counterparts, and homes in areas that explicitly offer antidiscrimination protections can be $127,000 more expensive.
Kristopher Houck, a 23-year-old music producer in Orlando, said he’s buying homes in the Los Angeles area with a friend after growing up in a religious family in central New York and Florida, partly because he wants to live in a more acceptable place Area.
“I couldn’t identify with most of the community. I always felt alone. It was ‘Oh, there’s that gay boy.’ They all knew me as the ‘gay kid,'” Houck said. “…I don’t feel responsible for having to endure that for the rest of my life.”
After two years of rising prices, there are some signs that the red-hot housing market is starting to cool down. Mortgage applications and housing starts have fallen sharply in recent weeks.
On Wednesday, the Federal Reserve signaled more rate hikes in 2022, which could further dampen demand.
Mrad said his mother offered to let him live with her for a while to wait for the market to cool down, but that her house was too far from his work.
“I was visiting my mother after work and it’s a minimum of a two-hour drive,” he said. “And even just a one-time trip to her, I get there and flop onto the couch. I’m exhausted, I’ve got street excitement, I don’t have the energy to do anything. I can’t imagine doing that regularly on a daily basis.”
Mrad said he’s considering using his retirement savings to bolster his purchasing power, or possibly working with his sister to buy a duplex. Meanwhile, the potential slowdown in the housing market has yet to impact his day-to-day searches.
“I don’t see that. I looked at houses [recently] and there are still lines of people waiting to look at open houses. If the data is nationwide, then it’s skewed because that’s definitely not what we’re seeing in Los Angeles,” Mrad said.