Young or old, rich or poor, single or married –
people in all stages of life are looking to invest in a home instead of
throwing away money on rent. And with women outnumbering men in higher
education and addressing the gender gap in salaries, it’s no wonder single
women are becoming a powerful force making up a significant chunk of the real
Despite low inventory, rising interest rates, and steadily increasing home prices, single female homebuyers make up 18 percent of all buyers, according to a 2018 report from the National Association of Realtors (NAR). For two years in a row, women were the second most common household buyer type behind married couples, which made up 63 percent. Single male buyers came in third, making up only 9 percent.
But what do single women getting into the
homebuying process need to know before meeting with builders, flipping through
listings, and going to open houses?
Here are seven things single women need to be
aware of and what it means for them to be leading in the market.
Why Single Women are Buying
On the whole, homeownership is on women’s
minds: 73 percent of women say owning a home is a top priority to them, over
getting married (41 percent), and having children (31 percent), according to a
Bank of America 2018 Homebuyer Insights report. In contrast, only 65 percent of
men said homeownership was at the top of their minds.
Who are these single women homebuyers? They’re not a homogenous bunch, according to research from the Joint Centre for Housing Studies. They’re women of all ages, races, and income levels, single and never married, single moms, widows, and divorcees. Nearly half live alone already and another 30 percent are single mothers. Two-thirds were previously married – either divorced or separated, the research suggests.
Why are they moving? It’s a combination of
factors, according to results from the 2016
Home Shopper & Buyer Insights Study by
Builders Digital Experience (BDX). A majority of single female homebuyers (54
percent) said home prices and interest rates were what triggered their urge to
buy, while increasing rent and more income were also at play in the
Save (Extra) and Get Your Credit in Order
As a single woman, you only have one income –
your own – to make homeownership work. That single income will need to cover qualifying
for a home loan, making a down payment, and making the monthly mortgage
The most important thing you can do with your
finances as a single female buyer is save for your down payment and get your
credit in order so you’ll be a responsible client to lenders.
Sixty-five percent of women said they’re saving for a down payment for their home, while another 49 percent said they’re consciously working on improving their credit score, according to a Bank of America report. Despite taking the initiative, 48 percent of women said they don’t have enough saved for a down payment and 47 percent said they wanted to have a higher salary before buying.
A 2017 Credit Sesame survey suggested that 42 percent of women said struggling to cover a down payment was the top reason they weren’t homeowners, compared to 38 percent of men.
As a general rule of thumb for conventional
mortgages, you should make a down payment of at least 5 percent. So, if you’re
buying a home for $200,000, you’ll need a minimum of $10,000 to secure a home
loan. However, 20 percent down is your best bet if you can afford it.
Check your credit report so you’ll know what
your credit score is, and how you may appear to potential lenders – are you
staying on top of your monthly payments and are all of your accounts in the
clear? If you see any glaring issues or adverse accounts, you’ll need to
resolve them because you don’t have a partner’s good credit to balance out your
While most homebuyers are shopping as a duo,
you’ll make your case to lenders as a solo applicant so your salary, savings,
and credit history will do all of the talking. You need to make sure your
financial house is in order.
Another option that
may be available to you is to ask a family member, such as a parent, to act as
a guarantor or co-signer.
What do You Qualify for … And What are You Willing to Spend?
Your next step is to speak with lenders, shop
for the best interest rates available to you, and feel out how much of a
mortgage you prequalify for. Not only does securing a prequalification letter
show you’re a worthy candidate, but it also lets you know how much you can
borrow (and buy).
Single men tend to purchase more expensive
homes, with a median price of about $215,000, compared to single women, who
tend to buy homes with a median price of about $189,000 – the lowest of all
household buyer types, according to the NAR report.
While the bank may pre-approve you for a
certain amount, this isn’t necessarily the range you ought to be shopping
around with. The bank crunches numbers and spits out this pre-approval figure,
but it’s missing your personal financial vantage point, such as how much you’re
spending on other bills and discretionary items, or what your financial plans
are in the long run.
Pace yourself and don’t jump into an expensive
dream home right away when you should be entering the housing market with a
starter home. The last thing you want to do is buy a house in the upper limits
of what you’ve qualified for and end up being house poor (pouring all of your
financial resources into your mortgage and running your home).
Instead, get incredibly familiar with your
budget so you’ll know how exactly much house you can comfortably afford,
factoring in your current and future lifestyle.
When determining how much homeownership will
cost, don’t forget to account for the hidden costs that aren’t upfront but are
recurring, such as insurance, property taxes, and maintenance fees, which can
add up to a sizeable amount.
With a single income, you could quickly become
a slave to your mortgage with very little wiggle room. With this in mind,
consider whether you’d like a fixed or variable rate mortgage, too.
Once you’ve decided on your sweet spot for your
mortgage, put it into practice: for a six-month period, budget with your income
as if you’re paying for your upcoming mortgage, bills, and other expenses. Are
you living comfortably or just barely getting by? This is an exercise that could
give you an honest read for what you can feasibly afford.
Dream Home Features
After considering how much you need to save and
how much of a loan you’re willing to take on, the next series of questions you
should ask yourself include:
- Will I feel safe here?
- Does this home fit into my
- How big of a home do I really
With only a single pair of keys to the home,
you’re calling the shots with your new household. This may be a key reason why
some women are getting onto the property ladder: 35 percent of single female
shoppers said they were tired of their current home, triggering the hunt for a
new place, according to the 2016
Home Shopper & Buyer Insights Study by
Builders Digital Experience.
The BDX research suggests 30 percent of single
women buyers just wanted a place of their own, and 10 percent wanted a bigger
Single women may be shopping for a few distinct
features though – namely safety, convenience and size of home.
Single women homebuyers are more likely than single men and married couples to buy condos over single-family detached homes, and they also “overwhelmingly prefer” two-bedroom homes over other buyers, according to statistics from the Joint Centre for Housing Studies (JCHS).
When it comes to location, they’re most likely to live in central cities, too, over the suburban life. According to the JCHS research, single women won’t compromise on a good neighbourhood close to amenities such as grocery stores, shopping, and fitness centres. They want to be in the thick of it and they’re willing to trade bigger homes for a better location.
Security is key, too – single women prefer safe neighborhoods or gated access. More safety measures you can take when searching for homes: avoid homes that bump up against dark alleys, of those with front doors hidden away from the street. Bookmark homes with entrance paths that are well-lit, drive-in garages with interior access into the house, and built-in alarm systems.
Factor in the Long Haul
Have an exit strategy in your back pocket as
you’re shopping for your new home in case your living situation changes. You
may end up moving cities for a new job opportunity, change careers, or get
married and start a family.
This could mean buying a home with rental
property potential so you can lease your condo, townhouse, or home if needed.
If times get tough or you want to save on living expenses, you could even
consider renting out a spare bedroom.
Choosing a good option for you now could also
mean buying a house with high resale value. You can also ensure your home is
one that’ll be scooped up on the real estate market by choosing a home that
isn’t over-the-top expensive, close to good schools, and nearby great
transportation links. And, of course, maintain the home and yard so it’s
attractive to potential future buyers. Finally, a new-build home is great, but
don’t go crazy with the customization if it’s not going to be your forever
home. Super-niche features might detract from the home’s resale value.
Don’t get swallowed up in walk-in closets and
open-concept kitchens. Picking a home that’s built to last also involves doing
your due diligence in getting a full inspection to make sure the foundation and
structure are all intact. This step is worth every penny because experts could
point out any issues.
Beef Up Your Emergency Fund
All homeowners need to have a slush fund for
when life takes an unexpected left turn, but an emergency fund is even more
vital to single homeowners who don’t have a partner who can pick up the slack
if, for example, they lose their jobs or go through a medical emergency.
There are also the unforeseen housing expenses,
such as leaky pipes or a broken stove, that will crop up. You need to make sure
you have access to about six months’ worth of mortgage and living expenses
saved up in a rainy day fund. Whenever you dip into this account, make sure to
replenish it, too.
Resiliency and Perseverance are Key
The journey to homeownership, whether you’re
building a new house or buying an existing home, is daunting. You’ll face
bidding wars, home inspections that may result in deals falling through and
other hiccups along the way – on your own. But remain calm, ride the wave of
ups and downs and keep your eye on the price: in a Bank of America poll, 46
percent of women said that homeownership made them feel responsible,
independent (43 percent), and empowered (31 percent).
If you’re still unsure of the process, arm
yourself with information. Shop around between lenders and real estate agents
until you recruit the right team. Do your research on neighborhoods, collect
crime stats from the regional police, and visit open houses to get a feel for
what you like. You can even sign up for first-time homebuying courses to get
better acquainted with what’s ahead.
Finally, trust in the team you’ve built, too, from your builders to your mortgage broker, your family and friends and any other support you have around you. By the end of the process and after all of the decisions you’ve had to make, you’re bound to feel much more informed, accomplished and confident. Ready to begin looking? Head over to NewHomeSource for current local and international listings!
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.