"Why does it happen?"
Why not? I don't think it matters whether the people you fall in love with / have sex with have the same genitalia to yours or different. What matters is the relationship and the meeting of two people and the expression of love.
"Where does it fit into the existence and higher self of those who are homosexual?"
No different from the existence and higher self of someone who is heterosexual. Who you have sex with is not you are.