The Fed made no move at its September meeting, but you'll want to read what the Fed said about future policy and implications for mortgage rates.

The Fed made no move at its September meeting, but you'll want to read what the Fed said about future policy and implications for mortgage rates.

Supreme Court decision creates more housing benefits for same-sex couples

The Supreme Court’s decision in Obergefell v. Hodges in June 2015 opened the way for same-sex marriage in the remaining states that did not allow it.

The ruling has been met with enthusiasm by not only same-sex couples and supporters, but real estate experts who believe the decision will help spark newly married same-sex couples to enter the housing market.

Same-sex marriageOne reason for this optimism came in a recent joint survey by Better Homes and Gardens Real Estate and the National Association of Gay and Lesbian Real Estate Professions. The survey found that:

  • 90 percent of LGBT homeowners already see homeownership as a good investment
  • 81 percent of LGBT non-homeowners believed the ruling will make them feel more financially protected and confident

Same-sex marriage legalization will especially help couples in the areas of VA mortgages and property-ownership status.

The VA recognizes same-sex marriage of all veterans

Chris Birk, director of education at Veterans United Home Loans in Columbia, Missouri, says the VA loan process has been “more onerous and expensive” for same-sex couples.

Before the recent ruling, the VA has allowed veterans and service members to have a co-borrower who isn’t a spouse or qualified veteran, but the joint loans for same-sex couples covered only the qualified veteran’s portion of the loan amount.

“That left applicants on a joint VA loan – who were not considered spouses – with the need for a 12.5 percent down payment. Most VA buyers make no down payments, which is a significant benefit of this historic home loan program,” says Birk.

After the Supreme Court struck down the Defense of Marriage Act in June 2013, the Department of Veterans Affairs announced it would begin reviewing applications on a case-by-case basis “to determine whether same-sex married couples could proceed in the same manner as opposite-sex couples.”

In the wake of the Supreme Court’s decision in June, the VA announced that it will “recognize the same-sex marriage of all veterans, where the veteran or the veteran’s spouse resided anywhere in the United States or its territories at the time of the marriage or at the time of application for benefits,” says Birk.

“Given that, I think we’ll see more same-sex married veterans and service members look into the VA loan, which is arguably the most powerful loan product on the market,” he says.

Same-sex couples granted full ownership status

Another benefit of the Supreme Court decision will be the way married borrowers typically take title of property, says David Brennan, senior vice president at Cape Cod Five Cents Savings Bank in Barnstable, Massachusetts.

Same-sex couples will now be able to both have “tenancy by entirety” ownership status. This is the strongest form of ownership and means that a spouse automatically takes ownership in the event of the other spouse’s death. 

“In many states where same-sex marriages were not allowed or recognized, there were limitations as to the legal types of property ownership status afforded to married couples. The ownership status of ‘tenancy by entirety’ is the most common way married couples take ownership of their property due to its legal advantages and protection for both owners. This form of title ownership, where offered, will now be available to same-sex married couples in all states,” says Brennan.

What will it mean to home buying?

For some real estate experts, the Supreme Court’s decision was deeply personal. Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, and his partner bought their first home in New York in the early-1980s for $10,000.

“Seeing equality reign in 50 states is a dream,” says Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, on Cape Cod. “I’m so thankful. Home is part of the American dream and continues to be for people of all stripes,”

Schoepfer and his partner – who have been together all of their adult lives and first bought a home together in New York in the early-1980s – have witnessed gay and lesbian couples go from the fringes of society into the mainstream.

So while Schoepfer doesn’t expect the Supreme Court’s decision to have much of an impact on his area, where same-gender couples have been buying homes Cape-wide, especially in communities with top school districts and low property taxes, he does expect a greater impact “nationally and regionally.”

Teresa Boardman, Realtor at Boardman Realty in St. Paul, Minnesota, isn’t so sure that legalization will flood the housing market with same-sex couples. Boardman says unmarried couples (same-sex and otherwise) have been able to buy homes before the Supreme Court’s decision.

“There are several groups in our society that have always been allowed to marry, but have low homeownership rates. The lack of a good job and a good credit rating holds people back from homeownership as does piles of student debt. Homeownership is lower in Minnesota today than it was in 2005 because of the crash of the housing market and the great recession. The ability to marry just doesn’t seem to have an impact on homeownership,” says Boardman.

Tough to gauge the impact

It’s difficult to gauge how same-sex marriage has affected home sales in the states that had already legalized same-sex marriage. Massachusetts was the first state to legalize same-sex marriage in 2004, for instance, but the Massachusetts Association of Realtors has not collected data concerning sexual preference of homebuyers.

Yes, there was a spike in home sales in Massachusetts that year, but it also coincided with the height of the housing bubble so you can’t say for sure whether same-sex marriage played a large part in the spike.

We’ll have a better idea next year. Adam DeSanctis, economic issues media manager at the National Association of Realtors in Washington, D.C., says the NAR will begin collecting data about same-sex married couples in its 2015 Profile of Home Buyers and Sellers. 

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