Single Women Homebuyers: What You Need to Know

Here’s a statistic that may surprise you: the fastest-growing segment of homebuyers is single women. Despite the fact that, on average, women still earn only about 85 percent of the pay received by their male counterparts for the same work, single women made up about 19 percent of home purchasers in 2020, and single men accounted for about 11 percent (the majority of homebuyers is married couples, at over 60 percent).

Several factors may account for why single women are outpacing single men as homebuyers in every major metropolitan region of the country. For one thing, single women tend to place a higher priority on saving and investing than their single male counterparts, and they tend to view home ownership as an important means to that end. A recent report from Bank of America found that 73 percent of single women (compared with 65 percent of single men) prioritized home ownership over other personal goals, including getting married (41 percent) and having children (31 percent). Another interesting statistic: more than 60 percent of single female homebuyers are age 55 or older, according to the most recent figures available from the National Institute of Realtors.

It’s important for single women entering the homebuying market to have some clear goals and limits in mind. This starts with setting a budget for your home purchase. While banks and other lenders will typically advise that homebuyers can spend about 28 percent of their gross (pre-tax) income on mortgage payments, insurance, and property taxes, it can be smart to set a private limit for yourself at a lower percentage to avoid being “house poor”: spending so much on keeping up with your home that you have little left for other expenses, entertainment, or saving and investing. Especially in the current environment of low inventory, you can easily find yourself in a bidding war with another prospective buyer. Know your limits before you go in.

Next, you should list your “must-haves,” which are different for every woman. Single moms may require a space that can become a play room or a home situated in a desirable school district. A house with a work-from-home space may be vital to others, especially in this pandemic age. The point is, you need to have in mind what attributes are a must, which would be nice to have, and which can be easily jettisoned as your budget dictates.

Finally, you should explore all your financing options. Interestingly, recent trends indicate that single women are making increasing use of online lenders, as opposed to traditional, brick-and-mortar institutions. So, when you’re shopping for the best mortgage rates and terms, don’t forget to include lenders like Better.com, QuickenLoans.com, Rocket Mortgage, and others. It pays to comparison-shop, and the convenience of looking at several online options, side by side, can save you both time and money.

As a fiduciary financial advisor, I help women in transition and other clients make smart choices for saving, investing, and other major financial decisions. If you would value greater clarity about your future resources and financial alternatives, click here for a complimentary second opinion on your financial plan and strategy.

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