Many homebuyers have been sidelined by rising home prices and the effects of the pandemic, but perhaps none more so than single women, and especially single women of color.
A recent survey by mortgage-buyer Freddie Mac found that 58% of single female heads of households said they can’t afford to buy a home and don’t feel like they will ever be able to. At 72%, Hispanic women were most likely to express this sentiment.
Homeownership is a primary means of building and passing down wealth in the U.S., so not being able to buy a home has lasting, generational impacts.
Freddie Mac identified seven barriers to owning a home and had respondents classify each one as a major or minor obstacle.
Not having enough money for a down payment and closing costs emerged as the greatest obstacle, followed by concerns about mortgage payments.
|Obstacle||% major obstacle|
|Not enough money for a down payment or closing costs||82%|
|Mortgage would be higher than rent||75%|
|Not earning enough for mortgage payment||74%|
|Not knowing how to start the process||63%|
|Not having established credit history||56%|
|Not knowing someone to help with the process||55%|
|Not having forms in native language||21%|
Rent and mortgage payments vary based on many factors, but according to national real estate brokerage Redfin the national average monthly rent in August 2021 was higher than the average monthly mortgage payment for a single-family home, even with a 0% down payment.
|Down payment||National average monthly rent||National average monthly mortgage|
This gap is expected to increase as the rents continued to rise from August to September. According to Apartment List, the national median rent increased 16.4% from January to September. From 2017-2019, the average rent growth for this time period was just 3.4%.
Freddie Mac found that more than half of single female renters are “cost burdened,” as defined by spending 30% or more of their income on rent. Fifty-seven percent of Black and Hispanic renters and 47% of White renters described their personal financial situation as “don’t have enough for basics or live payday to payday.”
Employment disruptions during the pandemic likely have a substantial impact on the homebuying confidence among single women.
Nearly 3 in 10 single female heads of households employed before COVID experienced disruptions to their work schedule and 13% left the workforce altogether.
Of the single women that left the workforce, 75% have not yet returned. Twenty-two percent plan on returning when they can find a job, 19% are not sure when they’ll return, and 9% said they will never return.
The pandemic amplified long standing barriers single women face homeownership, but with rent rising rapidly, breaking through those barriers may be the preferable option.