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Independent Women: Single Females Leading the Charge in Home Buying

Updated: Jul 14

New Trends in Home Buying


More women are breaking from the traditional belief that marriage should come before owning a home. In 2021, single women represented 19% of homebuyers, compared to 9% for single men, according to the National Association of Realtors. Since 2010, the number of single women buying homes has risen by 30%.

 

This trend not only highlights women's growing financial independence but also suggests a potential reduction in the gender wealth gap, as homeownership is a key avenue for building wealth.

 

Single Women Embrace Homeownership

A recent Bank of America study found that 92% of women see homeownership as a significant achievement, and 87% believe marriage is not a prerequisite for buying a home. In fact, 65% of single women prefer to purchase a home on their own rather than waiting for a partner.

 

The study also revealed that single women view homeownership as a significant milestone and source of pride, even more so than men. While 35% of single men felt proud to share their home-buying news, 46% of single women were excited to announce their new home. Additionally, 60% of single women shopping for real estate believe homeownership signifies that they have "made it," compared to 52% of single men.

 

The Challenges Women Face

Despite the positive trends, women still face significant challenges in real estate investing. They earn less than men, have lower financial literacy, and often lack confidence in the home-buying process. Fortunately, there are numerous resources available to help women navigate these challenges and become successful homeowners and real estate investors.

 

Barriers to Homeownership

Research shows that women tend to pay higher mortgage rates than men. For example, in Mississippi, single women paid an average rate of 3.47% for a 30-year fixed-rate mortgage in 2019, compared to 3.37% for single men. Although the difference seems minor, it results in about $7,000 extra in mortgage payments over 30 years. This exacerbates financial inequality, especially since women already earn less than men.

 

The reasons for these disparities are complex, involving lower incomes, less confidence in the home-buying process, and different mortgage shopping behaviors. However, women can access resources to help mitigate these factors.

 

The Gender Wage Gap

Although the wage gap has narrowed over time, women still earned 17% less than men on average in 2021. This gap is partly due to the types of jobs women hold and their caregiving responsibilities. However, 41% of the wage gap remains unexplained by these factors, suggesting potential discrimination.

 

Income is crucial for qualifying for a mortgage, and women's lower earnings lead to higher denial rates and higher mortgage rates. A higher debt-to-income ratio also puts women at a disadvantage in the home-buying process.

 

Confidence and Financial Literacy Gaps

Nearly 60% of single women renters believe they will never own a home, and less than half feel confident about the home-buying process. Many women report not knowing where to start or lacking someone to help them. Additionally, 75% of women believe a mortgage is more costly than renting, despite evidence to the contrary.

 

Improving financial literacy and confidence can help women overcome these barriers. Various online resources, such as the BiggerPockets’ InvestHER community, offer educational materials to support women in their home-buying journey.

 

Credit Challenges

It is challenging to determine if women have less attractive credit profiles for lenders due to a lack of demographic-specific data. However, some studies suggest women, especially single women under 40, have lower credit scores than men. This leads to a higher percentage of subprime mortgages for women and higher denial rates. Despite these challenges, women are better at keeping up with mortgage payments than men.

 

Why Women Should Invest in Real Estate

Women might lag in financial literacy, but they often make sound financial decisions, saving a higher percentage of their earnings than men. They tend to be more risk-averse, which can be beneficial if they diversify their investments. Real estate can offer steady or appreciating value even during market downturns.

 

Conclusion

The sooner women start investing in real estate, the more time they have to build wealth and help close the gender wealth gap, one investment at a time.


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