LGBTQ+ home buying challenges

The ranks of U.S. adults who identify as gay, bisexual, or gender nonconforming (LGBTQI+) has risen to a population of 31 million and counting. This increase is driven mainly by younger generations who have grown up in an era when self-expression has been unfettered by civil rights and the feminist and pride movements.

Now, what does it mean to say 31 million “and counting”?

We can expect this group of buyers and sellers to keep on growing, says the National Association of REALTORS® (NAR). The association notes that people under 45 make up a third of today’s home buyers, and “attitudes regarding orientation and identity among Generation Z in particular” are coming into their own. And they have the growing support of the public — particularly over the last ten years.

Outside of the Gender Norms, Acquiring a Deed Isn’t Always Easy

NAR’s annual Profile of Home Buyers and Home Sellers began surveying people in deed transactions about their sexual orientation in 2015, and on gender identity in 2019. By 2024, the total percentage identifying as LGBTQ+ passed the 5% mark.

At the risk of generalizing, we might say that this group experiences real estate transactions differently. The LGBTQI+ population regularly reports making more significant sacrifices than non-LGBTQI buyers to get that first-ever deed.

LGBTQ+ buyers also run up against more hurdles in the process. A major hurdle is saving for a down payment, with one in five LGBTQ+ buyers reporting trouble with that key step, versus 13% of all buyers surveyed by the National Association of REALTORS®.

According to NAR:

LGBTQ+ buyers are more likely than non-LGBTQ+ to have been held back by both high rent [and] current mortgage payments (36% vs. 25%) and student loan debt (38% vs. 24%).

More than a third of LGBTQ+ buyers have tuition debt. That’s compared to 20% of non-LGBTQ+ buyers. Plus, their debt is heavier in dollar terms. These student debtors carry a median of $35K in tuition financing, versus a median of $30K for other buyers. Enough to make saving for a down payment just that much more of a stretch.

“Significantly More Likely to Be First-Time Buyers”

This real estate market makes many people feel sidelined. It shouldn’t have to feel this way. A home of one’s own is something that ought to be possible for everyone.

While it’s not possible to generalize across the board about the LGBT+ population, the NAR survey indicates that the sidelining is especially stark for many people within it. One way this shows up in the numbers involves the percentage of first-time buyers in this group.

LGBTQ+ people are much more likely to be buying for the first time than non-LGBTQ+ buyers are. Close to half of LGBTQI+ buyers are first-timers. With others, fewer than a third are first-timers. This suggests that it takes more time for LGBT people to get into the position to buy, and that they’ll likely own less real estate (and build less equity) over their lifetimes.

Still more troubling: the NAR surveys show this gap getting wider, not narrower, in recent years.

But NAR also says that age is a big factor in this. LGBTQ+ buyers are not represented heavily in older age brackets the way they are among the millennial and Gen Z generations.

By the same token, LGBTQ+ sellers are also much more likely than others to be first-time sellers, and they tend to be more highly represented in the younger age groups.  

How the Number of Income Earners Varies in LGBTQ+ Households

Among bisexual home buyers and sellers, close to a third are parents. That matches the number of non-LGBTQ+ buyers and sellers who are parents. But among the bisexual respondents, there are more single mothers. This increases the financial responsibilities for this group.

LGBTQ+ buyers and sellers are often solo deed holders. That means, of course, that fewer have multiple incomes to handle their mortgage payments and other housing costs. Moreover, because LGBTQ+ buyers and sellers are less likely to be married, many never get to claim a number of tax advantages for spouses.

NAR finds it interesting that transgender and nonbinary buyers and sellers are more likely to have 3+ earners in their households. This indicates that they’re prepared to pool their resources and buy as co-owners to get a foothold on the homeownership ladder.

LGBTQ+ home buyers are more likely than most people to move away from the places where they were brought up. Many move away from childhood neighborhoods in order to find safe, LGBT-friendly locations. But moving is expensive. And sometimes, it means a disconnection from the support systems of birth families and relatives.

Co-owners who own homes as tenants in common can acquire their deeds as pairs, or as groups. They might be spouses, relatives, partners, or friends.

NAR Gives Suggestions to Real Estate Agents Based on the Survey

Agents should be aware of how demand is increasing among groups. It will make them more successful in supporting deed transactions.

Plus, it’s good for business. LGBT+ deed seekers add up to $1 trillion in home buying power.

With this background in mind, NAR suggests that real estate agents:

• “Develop tailored marketing and outreach strategies” to engage “the growing population of LGBTQ+ first-time buyers and sellers.” Such strategies should be aware of the higher hurdles many of these buyers and sellers experience. 

• Include this segment of buyers and sellers in marketing and client interactions, welcoming and supporting LGBT+ clients.

• Consider LGBTQ+ buyers’ needs specifically in outreach and programming for first-time home buyers.

• Connect these potential deed holders with home buyers’ workshops, financial resources, down payment assistance, and other support that can equip them to navigate through the real estate world. 

NAR explains that taking these actions puts the information gathered through its annual survey to good use. “Sensitivity to these issues will help real estate professionals better serve their LGBTQ+ clients,” NAR says, helping them acquire real estate deeds in a market that can feel unwelcoming.

NAR adds, again, that the LGBTQI+ population needs to be understood as more than just one category:

Bisexual and trans/nonbinary buyers and sellers in particular face more and different challenges than their lesbian and gay counterparts and may have different needs,” NAR states.

Some of these factors are “intrinsic to the ways in which they walk through the world.”

Well said, REALTORS®.