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Income inequality hasn’t stopped single women from becoming the fastest-growing segment of the homebuying market. In fact, it may be the reason.
With female workers in the U.S. still earning roughly 82 percent of what men earn for the same job, many recognize that they must save and invest with greater purpose to achieve financial wellness. And they increasingly view homeownership as a means to that end.1
A report by Bank of America found that 73 percent of single women (versus 65 percent of their single male counterparts) prioritize homeownership over other personal goals, such as getting married (41 percent) and having children (31 percent).2
According to Freddie Mac, the share of single women buying a home has increased by 30 percent since 2010.3
If you are planning to purchase a home without a partner, regardless of gender, you’ll need to plan ahead and budget carefully to be sure you find a property that meets your needs at a price you can afford. Consider these steps:
- Set a budget
- Explore loan programs
- Make a priority checklist
- Research the market
- Comparison shop for loans
While married couples still represent a clear majority (63 percent) of all homebuyers, single women account for roughly 17 percent of the market, according to the latest data from the National Association of Realtors. That compares with 9 percent of homebuyers who were single males, and 8 percent who were unmarried couples.
“If you look at the first-time homebuyer segment, you see that single females are a significant percentage of the market, second only to married couples,” said Jessica Lautz, vice president of demographics and behavioral insights for NAR. “Single female buyers are a little unique because many are age 50 or older who have chosen to stay single, are recently divorced, or now widowed. It’s a different demographic.”
Set a budget
As a single woman buying a home, your mortgage payment will likely be your biggest expense, but you still need enough money left over at the end of the month to cover your other bills, including groceries, utilities, credit card balances, and car payments.
If you buy more house than you can afford, you may also be unable to save for long-term goals, like retirement and you may be forced to eliminate vacations and dinners out from your discretionary budget, which gets old in a hurry.
For guidance on how much you may be able to reasonably spend on housing, consider the 28 percent rule. Most financial professionals recommend that homebuyers allocate no more than 28 percent of their gross (pretax) monthly income toward housing-related costs, which include their mortgage payment, principal and interest payment, property taxes, insurance, and any housing association or condo fees they may be assessed. So someone making $5,000 per month would potentially spend a total of $1,400 on housing expenses each month without compromising other financial priorities.
Keep in mind that the 28 percent rule is not one-size-fits-all. The amount you may be able to spend may be more or less depending on your current debt level, income stability, and financial goals. The important takeaway is to set a financial limit that makes sense for you — and stick with it. (Related: Budget basics)
One helpful trick to keep your spending in check is to start looking at houses on the low end of your price range and work your way up. That way, you can call off the search at the lowest possible price point when you find what you’re after. (Related: Buying a house: What millennial buyers want)
Explore loan programs
For single buyers, including women buying their first home, the biggest hurdle they may face is affordability, since they must qualify for a mortgage based on their income alone. That’s become an even bigger challenge in recent years as low inventory levels have priced more single-income shoppers out of the market, said Lautz.
The other potential roadblock is coming up with the cash for a down payment. But don’t let that stop you from pursuing your dream. These days, you don’t necessarily have to come to the closing table with 20 percent down, said Lautz. (Learn more: Home down payments: Do’s and don’ts)
National, state, and local programs abound to help qualifying borrowers get into a home. To determine whether you may be a match for a low down payment or less restrictive loan, try the National Council of State Housing Agencies or the Down Payment Resource organization.
Qualifying veterans, surviving spouses, and active-duty service members may also be eligible for a Veterans Administration mortgage, which requires no money down.
And civilians may be able to put as little as 3 percent down using assistance programs through Freddie Mac and Fannie Mae.
Finally, first-time buyers can potentially take advantage of a Federal Housing Administration (FHA) loan, which offers low down payments (currently as low as 3.5 percent of the purchase price), plus low closing costs and easier credit qualifications. (Learn more: What to consider when buying your first home)
Make a priority checklist
Before you start stalking open houses, make a checklist of needs versus wants. It will help keep you focused as you encounter nonessential amenities (like walk-in closets or farmhouse sinks) that might tempt you to compromise on your priorities.
Single females buying a home often have specific asks, said Lautz. Those with children might put a playroom and a good school district on the top of their list. Others may need a spare bedroom to rent out for extra income, or an in-law suite if they are caring for elderly parents. And older buyers, of which there are many, may wish to narrow their search to a condo (to eliminate yard work) near public transportation and/or medical facilities.
The highest percentage of single female homebuyers in the NAR survey were older women. Roughly 21 percent were between the ages of 55 and 64; 22 percent were between ages 65 and 73; and 21 percent were ages 74 to 94. (Related: Mortgages are tricky after retirement)
All single buyers should also consider whether they have the skill set, resources, and/or desire to tackle a fixer-upper, which could potentially be more work than they bargained for.
Research the market
If you’re moving to a new community, you will want to research the local area carefully, including the crime rate, commute time (if you work outside the home), health care facilities, public parks, community organizations, houses of worship (if that is a priority), and school system, regardless of whether you have children.
Home values in better school districts may appreciate more consistently, or at least hold their value when the housing market is soft.
Websites like StreetAdvisor and Foursquare that let you research local markets can potentially help.
You can also reach out to friends and family for recommendations on specific neighborhoods, talk to real estate agents for their insight, and ask locals for their perspective. You’ll most likely be living in your new digs for the foreseeable future, so vet your options carefully.
Shop for loans carefully
Finally — and this applies to all homebuyers — you will need to comparison shop for a mortgage loan.
Start by educating yourself about the fees and charges you may incur, including closing costs, points to lower the interest rate, and private mortgage insurance, (PMI). Hint: If you come to the closing table with less than a 20 percent down payment, many private lenders will charge PMI, an extra fee to compensate them for the higher likelihood that you may default on your loan.
Next, solicit mortgage loan estimates from multiple lenders, including your bank, credit union, mortgage brokers, and online lenders, which increases your bargaining power. To make it easier to compare offers, the Consumer Financial Protection Bureau recommends asking each lender for the same loan features, including term (or length of the loan) and down payment. Be sure the loan estimates clearly delineate whether the rate is fixed or adjustable, what the rate lock period is, whether prepayment penalties apply, and how much you may have to pay in points to lower your interest rate.
And don’t forget to negotiate—or at least try. “If you think you might be better off with something different than what is reflected on your loan estimate, go back to each of your lenders and ask to see a loan estimate that more closely matches your ideal scenario,” the CFPB advises on its website.
If you do not currently qualify for the most favorable rate, you might consider taking the next six months to a year to raise your credit score by paying your bills on time, reducing your debt, and correcting any errors on your credit report. A lower rate can potentially save you tens of thousands of dollars over the life of your loan. (Learn more: Saving money — and staying safe — when shopping for a loan)
Conclusion
Single women increasingly value their financial independence. And many view homeownership as a critical tool for building wealth.
Buying a home as a single woman, however, requires careful planning to ensure that you find a house that meets your needs. That includes crunching the numbers to determine how much house you can safely afford, making a list of your priorities, and researching your loan options so you understand the financial implications.
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1 Pew Research Center, “Gender pay gap in U.S. hasn't changed much in two decades," March 1, 2023.
2 National Association of Realtors,” NAR Finds Typical Home Buyer's Annual Household Income Climbed to Record High of $107,000 in Wake of Rising Home Prices and Mortgage Rates," Nov. 13. 2023.
3 Freddie Mac, “Single Women are the Fastest Growing Segment of Homebuyers. So Why Do So Many of Them Still Feel Homeownership is Out of Reach?" March 21, 2022.