Via Tyler Cowen, this is from the abstract of a recent paper that examines mortgage loans:
Interestingly, we also find that same-sex couples default significantly more (53.9%) than similar different-sex couples.
But that's not quite right. Here's what the paper itself says:
Male-male loan originations are associated with 2.053 percentage point higher delinquency rate relative to similar male-female applications. Given that the mean male-female delinquency rate is 3.81%, this result suggests that male-male applications are 53.9% more likely to be 90-day delinquent relative to similar male-female applications.... The coefficient for female-female is statistically significant at 1% level and is about a third of the male-male coefficient.
Lesbian couples are only about 0.78 percentage points more likely to default than straight couples. This difference manifests in loan rejection rates, which are considerably higher for gay men than for gay women (and both are higher than rejection rates for straight couples).
Why? The authors say only that "we are in the process of understanding
the mechanisms that drive these results." If the data were available (I suspect it's not) I'd be curious about the delinquency rate for married couples vs. partners. This is just a guess, but I imagine that married couples are less likely to default regardless of sexual orientation.¹
¹My reasoning is that partners can, if circumstances permit, just say fuck it, split up, and hand over the keys. Married couples have to get divorced, which makes their home part of a legal process.
"My reasoning is that partners can, if circumstances permit, just say fuck it, split up, and hand over the keys. Married couples have to get divorced, which makes their home part of a legal process."
This isn't really true unless only one person is on the mortgage and the title.
I split up with my partner 2 years ago. We're just now finalizing getting me off the mortgage. It's taking forever. It actually would've been easier if we'd been married - a divorce decree would've made it an open and shut process.
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This. AFAIK it’s astronomically more complicated to dissolve a property agreement than a marriage, at least from a legal standpoint.
Sometimes where the discrimination is measured is not where it originates. I wouldn't be surprised if a lot of it boils down to family estrangement. Lots of homeowners fall on hard times, and family members often give or loan money to help out for a bit. If same-sex couples are more likely to be cast out by their families, that emergency support system is gone for them.
Yeah, that's what I came here to say.
Not only is the legal situation when a same-sex couple splits more iffy, so too is their inherent safety net. They are far more likely to be estranged from their family, like my spouse is.
Add on top of that a slightly higher chance of any discrimination in the workplace, and boom, you have a tinier amount of risk that just looks alot larger.
And would be horribly unfair and discriminatory to apply to their loans.
I believe that any couple, straight or gay, who are married and living in the same state have exactly the same process legally if they divorce. Cohabitating couples may have different issues depending on the state.
In addition to this, it seems the authors already have their answer.
On every metric same sex couples have a much harder process to begin with.
Higher mortgage rejection rates and higher interest rates. More importantly, they also have a higher refinancing rejection rate, and interest rate for the refinancing.
Is it really surprising that the group of people that have to jump through the most hoops, and then the tallest obstacles to get and keep their mortgages are also the same ones with the highest failure rate?
How common is family estrangement in 2024? I would be shocked if it hasn't fallen considerably over the last, say, thirty years.
I'd like to see the data measured by zip codes, sorted by ratio of male-male couples to total population. And if you're especially cheeky, assign Z-axis to the ratio of income of male-male couples to the median.