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Women Home Buyers: Challenging The Gender Gap In Housing Investments

Hanna Kielar8-minute read

November 22, 2022


First comes love, then comes marriage, then comes a house! American households are evolving and couples are having kids at an older average age. The old notion is out the door as single women are making money moves and buying homes. These shifts in family structures have largely been driven by an increase of women in the workforce, new career opportunities and financial independence.

Happy households come in all different shapes and sizes – some families maintain the nuclear structure while others enjoy a matriarchal structure or another alternative. Even though a woman still makes 84 cents to a man's dollar as of 2020, according to a survey from the Pew Research Center, women are taking on a bigger role in their family's financial decisions than their partners.

Single women are buying up more property than single men but are receiving the shorter end of the stick when it comes to the return on their investment. So what gives? We'll explore the various facets of this gender gap, why it may be occurring and the steps we can take to close it.

Single Women Own More Homes Than Single Men But Get Lower Returns

The National Association of Realtors' housing trends report showed that single women made up 22% of home buyers in 2020 with single men trailing at 9%. Surprisingly, a recent Yale study found that single women pay around 2% more when purchasing a house, and sell it for 2% less.

2% may not seem like that much, but after factoring the cost of a mortgage, single women are losing $1,600 per year on average compared to a single man in a comparable house. The researchers noted that the gap size depends on how long you live in the home, the longer you stay the gap decreases.

An additional caveat to the 2% trend was that the discrepancy was reduced when single women bought from and sold to other women.

So, Why?

It's important to note that divorce can play a factor in the number of homes single women own, as they will often gain the home in a divorce settlement. On the flip side, there are plenty of other reasons that can explain why women are purchasing more homes than single men. Women are earning more college degrees and also typically take fewer risks in money-making decisions.

There is a lot more at stake as these losses can make a big impact on your future financial health. Kelly Shue, Professor of Finance at Yale and one of the lead researchers of the study, explains, "These variations in housing returns are large and may help explain the gender gap in wealth accumulation at retirement."

How The History Of Homeownership Has Shaped Today

While this piece focuses primarily on women's experiences in homeownership, it would be neglectful to ignore the intersectionality of housing discrimination throughout US history. There has been a variety of legislation and practices that made it more difficult for people of color, people with disabilities and the LGBTQ+ community to enter and profit from homeownership. The history is deep and complex, and we'll just barely scratch the surface, but we encourage you to learn more – what came before us has shaped where we are today.

A study showed that single women surpassed single men in homeownership back in 1985. At that time, about 42% of single men with no children were homeowners compared to 53.6% of women with no children. In 2015, 52.6% of single women with no children were homeowners compared to 46.2% of comparable men. When adding children to the mix, these numbers start to shift in favor of single men.

The 2015 data shows that married couples garner higher rates of homeownership with or without kids. Couples with kids were recorded at 70.8% and those without at 82.5%. The 19.8% disparity between single women with or without kids is massive compared to the 0.06% difference in single men. These numbers may show that single parents need more support to achieve their financial goals.

Looking at the numbers for families and unmarried couples, there hasn’t been much change over the previous 5 years. The National Association of Realtors’ previous trends report noted that 8% of home buyers in 2015 were unmarried couples, compared to the 9% of buyers in 2020.  In 2015, 36% of all buyers had children under the age of 18 residing at home while in 2020, 35% of all buyers had children of the same age.

On the other hand, only 16% of purchasers were single women home buyers in 2015 and 9% were single men. That means single female home buyers have increased 6% between 2015 and 2020, where families, couples and single male home buyers have pretty much stayed the same.

More open-minded views on family structure are leaving room for new types of family structures and partnerships that shift away from a traditional patriarchal family structure. In many cases today, women are surpassing their male partners as the family's breadwinner. While there has been a lot of progress overall, there is still more to be made.

Why Single Women Pay More And Sell For Less

There are a couple of reasons that may explain why this gap exists. Those stand-out factors are the negotiation process, market timing and potential attachments to a particular property.

Gap In Negotiation

Some studies have shown that women are less likely to negotiate, but a more recent study examining salary negotiations found that women do "ask" as much as their male counterparts but they don't "receive" at the same rate. Some of the social perceptions of and biases against women may come into play in bargaining situations.

For women of color, these issues may be compounded. As a result of this imbalance, women may need to arm themselves with more information and be better negotiators than their male counterparts to achieve their desired results.

While biases have cost many women extra dollars when buying a house, there are steps to help single female buyers overcome this form of prejudice in bargaining outcomes. Later on, we'll explore different tips to help women do the right research and show up better prepared for negotiations.

Market Timing

The Yale study showed that, on average, single men timed the market better than single women, which plays a large role in return on investment. When looking at this factor, it's also important to consider the fact that there are 368% more single-mother households than single-father households, as of 2020, according to Statista. When adding children to the market timing mix, you may not have the same flexibility and bargaining power to hold out for a better deal.

Not Seeing True Value

The idea that women may be too particular about their potential home was mentioned in the study but not listed as a data-backed reason. The argument is that perhaps women are pickier about a property's features or fall in love with the house they see as "the one."

Shue pointed out that this could account for part of the purchasing gap, but it doesn't necessarily explain why women's homes sell for less on the other side of their investment. The exact answer to this gap is a bit unclear. Perhaps women need to push harder than men to get the same results or do more research to appear just as informed – it's hard to say. Of course, situations change on a case-by-case basis but if you show up better prepared, armed with knowledge and greater confidence, you'll likely see better results.

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Tips For First-Time Single Women Home Buyers

Closing any gap built upon inequality and prejudice requires everyone to be aware and to actively fight against it. We can't control others' thoughts or actions, but there are things women can do to improve their bargaining outcomes and have a more positive home buying experience.

Before digging too deep into your home buying search, make sure you understand how mortgages and home buying work. See some great resources to reference or learn from below:

Below are 10 additional tips for first-time and repeat buyers to help them close the women’s housing gap and become savvier homeowners:

  1. Know your rights. By researching your rights as a home buyer or owner, you can better recognize shady or discriminatory practices. The U.S. Department of Housing and Urban Development (HUD) has a wide network of housing help and information about your rights.
  2. Improve your credit score. Landing a great mortgage is a crucial part of getting the best return on your investment. To get the best mortgage rates, you need to have a good credit score.
  3. Seek professional advice. Even with research, you probably will still have questions about the home purchase process. That’s why you should talk to a mortgage specialist.  Even those who are well-versed home buyers can benefit from the current trends and insider tips that experts can provide.
  4. Evaluate comparable sales and statistics. There are many ways to assess the value of a property. One way is to look at the sale price of similar homes in the neighborhood. You can also check out other indicators of a home’s value such as unemployment rates and job growth of the area. These numbers can showcase the investment potential of your prospective home.
  5. Look into special loans and low interest rates. To get the best deal on your mortgage, you should take advantage of additional resources and programs available to you. There is a wide variety of down payment assistance options in the forms of no/low-interest loans, grants and more.
  6. Learn about the seller’s motivation. Understanding the seller’s motivation not only helps you find a more effective negotiating tactic but it can also help you make a personal connection with them. Take time to see if the current owner has a mortgage or conduct a public record search.
  7. Always pay for a professional home inspection. A home’s value is only as accurate as its inspection. You should always get a potential purchase inspected. Without a quality home inspection, it’s too easy to get burned and lose big time on your investment. You can also use the home inspection report as a bargaining chip.
  8. Show you’re a serious buyer. By showing you're serious about purchasing a house, you can help speed along the buying process and get the sellers to trust that you're a feasible option. You can offer a large earnest money deposit or attach a preapproval letter to your bid.
  9. Experiment with negotiation tactics. There are various strategies that you can use to get the best price. The tactic you go with should be tailored to your specific market, property, seller and their personal situation. Talk your real estate agent about what has worked in their experience and see if they have any recommendations.
  10.  Be patient and know when to walk away. Searching for a home and losing out on a promising property can be draining. It’s important to stay positive and not get deterred when things don’t go according to plan. Some tips for dealing with discouragement include managing your expectations, understanding your reaction tendencies and handling disappointments in a healthy way.

The Bottom Line: Know Your Worth

Ready to take the next step in your home buying journey? We offer a variety of resources tailored to where you are in your journey and when you want to buy a home. Our mortgage calculator can help you estimate your total costs. Knowledge is power – stay informed and don't settle for less than what you deserve.

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Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto, RocketHQ, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.