How Single People Afford Homes

New Study Shows Difficulties of Single Homebuyers

How Single People Afford Homes
May 4, 2018

Home ownership is a fulfilling but difficult goal. The challenges of being single can make it even more difficult to find an affordable home to buy – especially for single women.

According to data provided by Zillow, the typical single American requires almost eleven years to save up a suitable down payment for a home purchase. Zillow found that married couples or partners can achieve the same down payment goal in less than half the time.

Once a suitable down payment is in hand, singles still face a home affordability hurdle. The average single homebuyer can afford a home up to $176,100, making less than half of America's homes (45%) within reach for singles. In contrast, the average couple can afford 82% of America's homes. Four markets (Boston, MA; Denver, CO; Sacramento, CA; and Portland, OR) all have affordability gaps of more than 60% between singles and couples.

The situation is even worse for single women, thanks to a persistent gender wage gap. The U.S. Census Bureau found that women earned just below 80% of men's average wages in 2015, while the Pew Research Center estimated women's wages at 83% of men's wages when part-time workers are included.

With smaller budgets on average, single women can afford an even smaller percentage of homes (39% nationally compared to 52% for single men). In the top 35 metropolitan housing markets that Zillow analyzed, single men could afford more available homes than single women in every market. Cincinnati, Ohio was the worst, with single men able to afford 43% more of the available housing stock than women.

The least gender discrepancy was found in San Jose with a difference of 3% – small consolation because fewer homes in that market are affordable to any singles, regardless of gender. Only 22% of all couples and less than 2% of all singles can afford a home there. Zillow estimates that to purchase a median home in the San Jose market, single men need to save for 38 years – and single women need to save for a staggering 58 years.

Cincinnati is more indicative of the average market, with single men needing to save for just under fifteen years and single women for just under twenty years to afford a median home – but discrepancies remain.

As a single person, how do you approach the home buying market? Start with a realistic assessment of what you can afford. Review your current income and expenses and determine what sort of monthly payment you can afford to make. Subtract at least 5-10% for regular maintenance, repairs, and the usual unexpected expenses that come with home ownership.

With a monthly payment in hand, use online mortgage calculators to run scenarios and determine what you can afford to pay for a home given your down payment situation and monthly payment limitations. Meanwhile, contact potential lenders to determine your qualification limits. If your budget and home expectations stay within the lender's limits for your situation, you're ready to go.

Be prepared for a long search, given that you will have fewer affordable homes from which to choose. Avoid the temptation to overspend and/or jump at the first opportunity without researching the market. Find someone to use as a suitable sanity check on finances – a mortgage professional, trusted friend, or both.

Finally, keep your credit score high by making all payments on time and not taking on excessive total debt. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. You'll receive better mortgage interest rates, and by definition, the fiscal discipline required will make it easier for you to afford a home.

MoneyTips is happy to help you get free mortgage quotes from top lenders.


Photo ©iStockphoto.com/MartinBarraud

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