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The Glass Roof: Strengthening Women’s Home-Purchasing Power

Editor's note: This piece originally appeared in the September issue of DS News, out now.

When it comes to the subject of single female homebuyers, there is good news and not-so-good news. On the
positive side, this demographic continues to outpace its male counterparts in the pursuit of homeownership. However, the number of single women looking to purchase homes has been declining for years, and younger single women have yet to fully make their presence felt in the housing market.

According to the 2020 Home Buyers and Sellers Generational Trends Report published by the National
Association of Realtors (NAR), married couples are still the dominant force in the housing market, accounting for 61% of transactions, while unmarried couples trailed behind at 9%. For those approaching homebuying on their own, single first-time female buyers made up 17% of the market while single first-time men buyers trailed at a 9% share. Yet the share of single first-time women buyers has been falling since 2006, when it peaked at 27%.

Also during 2006, the number of repeat single women buyers was 18% and the percentage of all single women buying homes was 22%. Today, the percentage of repeat single women buyers is 17%—a scant difference from 14 years earlier—while the percentage of all single women buyers is now at 17%, a 5% decline.

In its new report, NAR determined that women between the ages of 65 and 73 were the group with the highest share of single female homebuyers, at 22%. NAR also found the median age of single women buyers to be 54. Single female millennials are not front and center in the housing market, NAR noted, with only
14% of single female buyers within the younger millennial demographic and 12% within the older
millennial segment.
What is driving this data?

According to Jessica Lautz, VP of Demographics and Behavioral Insights for NAR, several economic factors are combining to work against single women. The Uphill Struggle “I believe it's due to housing affordability,” she observed.

“Single female buyers generally have lower household income, and so it might be more difficult for them to enter the market, especially as home prices continue to increase.”

Indeed, the most recent data from the U.S. Census (covering 2018) determined that average gender pay gap was roughly 18.9%, which means that a woman working at full-time, year-round job only earns 81.1% as much as her male counterparts. Lautz also pointed to a seesaw effect has occurred with women in unmarried
relations becoming more active in homebuying.

“In looking at the first-time homebuyer share who are single females, we continue to see a decline there,” Lautz continued. “But what has also happened is that we've seen a rise in roommates who are purchasing together and a rise in unmarried couples who are purchasing together. It's very possible that people are partnering up to try and purchase a home with dual incomes.”

Miki Adams, EVP at CBC Mortgage Agency, acknowledged that many single women are coming to the housing market with a lesser financial advantage than other buyers, especially if the women are single parents.

“Single moms really struggle much more than any other any other group of homebuyers,” she said. “First, they've got the disadvantage of earning less than their male counterparts. They struggle to keep up with the costs of food, shelter, clothing, education, childcare—and not just normal childcare, but afterschool care, summer care. Plus, there are utilities, transportation, and the list goes on. So, for those managing it alone, it's easy to see how buying a home can seem like an impossibility.”

Compounding that perceived impossibility are financial hard facts that go against many women. The U.S. Census Bureau has determined that 25.7% of families headed by women with no husband present are below
the poverty level and 40.8% of those households have children below 18 years, while 48.4% have children under five. There are 2.7 million mothers between the ages of 25 and 34 who are either not married or are living with a partner, according to the Census Bureau.

The Factors Behind the Facts

However, Adams cautioned that the downward trajectories from 2006 to 2020 are not necessarily unique to single women homebuyers.

“Back in 2006, that was before the housing market crash,” she said. “After the housing market crash, impacted families and those who are millennials now may have shown a hesitancy to get back into the housing market. That might be have something to do with such a drop.”

Adams added that the high percentage of single female homebuyers in 2006 could also have been fueled by the looser underwriting standards of that time, coupled with the proliferation of subprime loan products. The result of that environment, she recalled, was catastrophic for many.

“There were a lot of homebuyers that ended up getting foreclosed on,” she continued. “So, there's some good chance and good likelihood that someone that fell into that situation maybe didn't reenter the market for some time.” In regard to NAR’s data, which found a greater number of older single women pursuing homebuying, Kim Chamberlain, an associate broker with RE/MAX-Allegiance in Woodbridge, Virginia, did not see the low percentage of younger single women as being unusual.

“Actually, the millennials are perfectly fine renting,” she said. “I see them as wanting little to no maintenance, and they look at a mortgage as maintenance. They look at a homeownership as maintenance. I also believe that millennial student loan debt is a factor, and they are intimidated by the down payments So, I’m finding it is more middle-aged to upper-aged women who may be divorced, either with or without kids, at the peak of their careers who are buying homes.” David Aikman, a loan officer with the Fairfax, Virginia branch of Rhode Island-based Embrace Home Loans, also emphasized that a mortgage loan is typically a long-term commitment” and many single  millennial women aren’t yet financially ready to take that step.

“I'm sure that the millennials are starting to enter the market a little bit, but they are definitely not a big piece of the market, and so it doesn’t surprise me that the percentage of young, single female homebuyers is low,” he said. Lautz discerned that “single female buyers have traditionally always been in their fifties, and
we suspect that it's because they could be coming from a past marriage, perhaps being widowed or divorced. While they’re not the traditional first-time homebuyers in the market, they seem to be bringing equity from a past home for their down payments.” And still, single women are buying homes, with Adams adding that the “benefits for them are too compelling.”

This is evident in a report issued in January by LendingTree that found single women owned more homes than single men in the nation’s 50 largest metropolitan areas, with 5.1 million homes owned by single women versus 3.5 million homes owned by their male counterparts. Within the major metro markets, the average difference between the share of homes that single women compared to single men is 3.9%, with Richmond, Virginia, having the largest homeownership gap between the sexes (7.1%, or 22,678 homes) and Las Vegas the smallest gap (1.2%, or more than 5,000 properties).

Tendayi Kapfidze, Chief Economist at LendingTree, theorized that the higher level of single female homeowners could be attributed to a need for constancy and steadiness in their lives, especially if the women are raising children on their own. “There are a lot more single parent households that are led by women than they are led by men,” he said. “A lot of this could be a lifestyle preference in wanting to get that kind of stability. Even with married people who have kids gravitate towards homeownership more than people without kids. I just had kids myself this year and all of a sudden I'm like, ‘Oh, yeah, maybe it's time to buy a house.’”

The Inside Angle

Today’s single female homebuyers have fans on the other side of the fence: women in the
mortgage profession who are rooting for their success in achieving homeownership. Chasity Graff, owner of the Baton Rouge, Louisiana-based mortgage brokerage LA Lending LLC, admitted to often seeing something of herself in the single women who seek out her guidance in the homebuying process.

“I can tell you that as a daughter of a single mom and as a woman who deals with mortgages all the time and as a woman mortgage broker who owns her own business, that is something that I truly focus on,” she said. “Everyone I know in this industry—and there's a lot of women underwriters in this industry—have a huge soft spot for independent women trying to pursue this.”

Graff stated that she places an emphasis on education when working with her single female clients to ensure they are fully aware of the depth and scope of responsibility that comes with mortgage-bearing homeownership.

“It’s about educating them on what rental prices are versus what the barriers are for entry on buying a home,” she continued. “It involves explaining if 100% programs or down payment options are available that to that specific person.”

And while Graff stressed that she treats male and female clients equally, she has found that with single female clients she sometimes needs to “dig into the education platform more and remove that stigma and remind them they don’t need to be married to purchase a home.”

Alishea Pipkin, Retail Sales Manager in the Shreveport, Louisiana, office of Planet Home Lending, defined single female homebuyers as a “strong force in today's market,” adding she has more single women than single men seeking home loans.

“There has been a big growth of single female buyers in the last three years,” she said.

Pipkin noted that this new wave of buyers can be attributed to society’s changing perspective on both homeownership and female empowerment.

“I'm a military brat who came from a two-parent household,” she recalled. “When I was young, I thought a woman had to be married with a family in order to buy a home. But as I grew up and started learning more about the process, I learned that idea was wrong. But there are a lot of people that feel a woman has to be
married and have a split income in order to be able to afford to buy a home. That's just not true. We've been proving it time and time again that a one-person family can buy a home and pay almost the same amount in a mortgage that they will pay in rent.”

REM/MAX-Allegiance’s Chamberlain observed that she finds single female clients more focused and organized when it comes to house hunting.

“As far as the women and men clients of mine, the women tend to pretty much have things more together through the loan process and stronger credit profiles,” she said. “They definitely know what they're looking for, versus a male who may not have that strong of a credit profile or is very indecisive about what they want.”

A Look at Investment

One area where single women are underrepresented in the residential real estate sector involves investment properties. Merced Cohen, EVP of Operations for Civic Financial Services in Redondo Beach, California, noted that while her company has made “a concerted effort to support female real estate investments,” she estimated that her company has about 26% more male clients than female clients.

“If you were to ask me what's preventing single females—or females in general—from investing in real estate as a means of income, either through flip, fix and flipping, or rental, I think ultimately, it's due to a lack of
confidence,” she theorized. “I think a lot of that comes from wondering, ‘Where do I start? And where's my support in this male dominated industry?’” Cohen explained that some women believe they run the risk of
being exploited in a process, such as construction, where they have little or no expertise.

“It is like a woman who may not have confidence or feel she is being taken advantage of when it's time to bring in their car,” she continued. “They may not know that space as well and feel that they may be taken advantage by the mechanic. The same holds true in this space, potentially with contractors. I hate to say that, but it's out there, and I think there's discrimination against women investors by contractors.”

Cohen’s solution to this situation was for “women to begin to build their confidence, and the best way they can do that is by surrounding themselves with mentors and the right people.”

She recommended the real estate investment resources website BiggerPockets.com and meetups at real estate investor conferences as a route for building a network of information support. As for women who are buying residential real estate for investment purposes, Cohen has tracked women at an average age of 48 who are focused “mostly in the under $500,000 range.” For herself, Cohen is doing a home-based advocacy to ensure more younger single women follow this route.

“I tell my own daughter: real estate before marriage is the mantra,” she said.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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