Tips to Buying a Home for LGBTQ+ Homebuyers

Purchasing a new home is a monumental investment and certainly an achievement for any new home buyer. For prospective home buyers who identify as LGBTQIA+, representing lesbian, gay, bisexual, transgender, queer, intersex, asexual (or ally, in some contexts), and others, additional challenges in the home buying process pose barriers to closing on their dream home.

Some of these challenges have eroded over time as LGBTQIA+ populations have slowly been granted federal civil rights protections, such as with the legalization of same-sex marriage in 2015 and President Biden’s executive order in February of 2021. This order directed the U.S. Department of Housing and Urban Development (HUD) to enforce the Fair Housing Act to prohibit discrimination on the basis of sexual orientation and gender identity. However, a long history of discrimination in housing and banking created an impact that continues to have residual effects on LGBTQIA+ home buyers today.

Challenges For LGBTQIA+ Home Buyers

Here are some of the challenges LGBTQIA+ prospective home buyers may encounter, and how to prepare for them.

Housing Discrimination

Previously, federal laws against housing discrimination as part of the Fair Housing Act did not consider sexual orientation and gender identity or expression as protected classes. Effective February 2021, LGBTQIA+ populations became protected through an expansion of the law signed through a Biden executive order. Unfortunately, many acts of discrimination persist.

It’s not often that a real estate agent will blatantly verbalize their discomfort or disapproval by telling a prospective buyer, “I won’t sell you this house because you are LGBTQIA+…” More often, these types of biases and discriminations are subtle or easily masked.

For example, a seller might outright reject your offer for another lower offer with no added benefits to the seller. An agent or seller may become aware of your identity and drop your purchase agreement without explanation. It may even be the case that you make an offer on the home, then the home is suddenly taken off-market only to be relisted a short time later.

All of these odd situations, and many others, could be an indicator of discrimination.

Income Disparities

Due to a history of employment discrimination and a pay gap, saving money and accumulating wealth is a greater struggle for LGBTQIA+ populations.

According to data sourced by the Center for LGBTQ Economic Advancement & Research, LGBTQIA+ populations are less likely to have a savings account and 7-in-10 LGBTQIA+ renters reported insufficient down-payment savings as an obstacle that prevented them from purchasing a home in 2017. In combination with the effects of institutionalized discrimination such as being barred access to federal marriage benefits until 2015, these financial setbacks have created significant hurdles for LGBTQIA+ populations to securing homeownership.

Inadequate Affordable Housing in Inclusive and Protected Areas

For many LGBTQIA+ couples, legal protections and an inclusive community are important factors when determining where to buy a home.

Due to the federal mandate to delegitimize housing discrimination based on sexual orientation and gender identity only recently being enacted in 2021, LGBTQIA-friendly areas primarily existed in areas where state and local protections were initiated earlier. These most often occurred in densely-populated urban areas where homes are not always affordable for the general population.

As LGBTQIA+ individuals move into areas that are affordable, areas transform into inclusive communities. However, this takes time to evolve.

Lack of Permanent Federal Protections

Even as LGBTQIA+ populations are incrementally receiving protected status through President Biden’s executive order and the legalization of same-sex marriage in 2015, neither of these advancements are codified into U.S. law.

The lack of permanent federal protections puts LGBTQIA+ populations in a fragile state, as a future administration can repeal these legislative advancements. With the proposed Equality Act stalled in the U.S. Senate, the rights of LGBTQIA+ populations are in a precarious situation.

Advice for LGBTQIA+ Homebuyers

That was a lot to absorb, but it is the reality for millions of LGBTQIA-identifying Americans. If you identify as LGBTQIA+ and are a prospective home buyer, here’s what you can do to help manage these challenges.

Know your Rights

In alignment with President Biden’s 2021 executive order and the Fair Housing Act banning housing discrimination, you have a right to buy a home free of discrimination.

No individual or group may refuse to sell you a home or deny you access to a home loan based on your sexual orientation or gender identity. However, this can be reversed by a future administration if Congress does not pass a permanent federal law to codify these protections.

Connect with Local and National Resources

The best way to become familiar with your rights to homeownership is to connect with local and national resources, organizations, and groups that work for the protection of your rights.

The Office of Fair Housing and Equal Opportunity of the U.S. Department of Housing and Urban Development (HUD) makes available a wide range of resources and information for LGBTQIA+ individuals, including up-to-date regulations, protocols, and a list of states with codified laws banning housing discrimination for LGBTQIA+ populations. You can also check out the Human Rights Campaign’s State Equality Index to learn more about statewide laws and policies. The National Fair Housing Alliance may also be a great resource.

Finally, local community chapters and homeowners’ groups in LGBTQIA-friendly areas may also be valuable resources when you are looking for your dream home.

Identify and Report Discrimination

Use the scenarios above and your own judgement to identify discrimination in the housing market. If you feel you have experienced housing discrimination, you can file a complaint with the federal government. A representative will review your complaint and determine whether the government will proceed with an investigation. If you live in a state, city, or county with local protections, there will be a similar process to file a formal complaint as well.

Select a Supportive Real Estate Agent

One of the best things you can do to ensure a smooth home buying process is to choose a supportive agent. Consider obtaining references or check out the National Association of Gay and Lesbian Real Estate Professionals (NAGLREP) to find a professional in your area.

Financially Prepare

Especially for first-time buyers, it is critical to prepare for the financial investment of buying a home. Prospective homebuyers can be proactive by saving for a down payment as early as possible.

Financial planning is critical, especially for same-sex couples and LGBTQIA+ individuals as part of a group that has experienced institutional discrimination for decades. Consider connecting with an LGBTQIA-friendly financial planner who is familiar with investment strategies to assist you in the process of borrowing for your home loan and saving for the long term.

Check Out the Neighborhood

For many LGBTQIA+ home buyers, finding an inclusive community is important when house hunting. Many prospective homeowners spend time exploring neighborhoods, meeting potential neighbors, and becoming acquainted with local resources as they search for their new home.

Note to Real Estate Pros: LGBTQIA+ Buyers are on the Rise

A Gallup estimate in February of 2022 suggests that the proportion of the U.S. population who identify as LGBTQIA+ has increased steadily from 3.5 percent in 2012 to 4.5 percent in 2017 to 5.6 percent in 2021, representing almost 19 million U.S. adults. This increase over time has been driven by the larger percentage of Millennials who identify as LGBTQIA+ (10.5 percent in 2021) and Generation Z (20.8 percent in 2021).

According to the NAR 2021 Profile of LGBTQ Home Buyers & Sellers, (PDF) the proportion of buyers and sellers who identify as LGBTQIA+ is likely to increase as Millennials (making up 37 percent of home buyers in 2020) and Generation Z take over the real estate market. For real estate professionals, it is critical to understand the challenges faced by prospective home buyers and to take action against all forms of discrimination.

Find Your Dream Home

Members of the LGBTQIA+ community continue to face unique challenges in the home buying process. Knowing your rights, learning how to identify and report acts of discrimination, and finding a supportive real estate agent are the first steps to finding your dream home in an inclusive and welcoming community.