There’s Good News and Bad News for Single Women Who Buy a House (But the Bad News Can Be Avoided…)

The good news for single women is that they outpace single men in terms of homeownership. According to the National Association of Realtors, as of February 2023, single women were 17% of all homeowners, while only 9% of single men own a home.

The bad news is that single women don’t get as good of a return on their real estate investments as single men do, according to a recent study published in The Journal of The American Finance Association.

It’s a long report, and not the easiest read, so let’s highlight a few of the key findings in plain language:

• It was a thorough, objective analysis. They analyzed over 50 million home sales in the U.S. between 1991 and 2017, focusing on 9 million transactions which they could specifically identify as a home being bought or sold by a single female or single male.
• Single men earn an average of 1.5% higher return per year. However, that’s only when they do not take into consideration that most buyers (male or female) purchase a home with a mortgage. Taking the “leverage” of a mortgage into account, males actually benefit from a 7.9% higher return over single women.
• On average, single women pay 2% more than a single male when they buy a house…
• …and sell it for 2% less than a male does when selling the house. Simply put, single men buy low and sell high, while single women buy high and sell low. Women were less likely to negotiate the price of a house down when negotiating with a seller, and would typically accept a lower price from a buyer for their home than a single male.
• It’s not that men choose better houses to buy. They attributed 45% of the difference in returns to the moment when the purchase or sale occurs, which isn’t related to men choosing a better house or doing more profitable home improvements during the course of owning a home.
• Single women lose about $20,800 in wealth on a house… The study found that the average loss was $1,600 in wealth accumulation per year, which grows to $20,800 over 13 years, which is the average amount of time most people live in a particular home.
• …which accounts for a 30% gap in overall wealth accumulation. Because real estate is typically the largest asset most people own, the difference in return creates a larger percentage gap in total wealth built over their lifetime.

So, Should Single Women Just Not Buy a House at All?!

All of that may sound like buying a house is a losing proposition for single women, but that’s not what this information is saying. In fact, they conclude by saying, “Finally, we emphasize that women may derive greater utility from home ownership despite earning lower financial returns.”

Simply put, they’re saying that it’s not that single women don’t financially benefit from owning a home; it just shows that they haven’t fared as well as men when it comes to how much of a return they achieve.

Why Does This Happen?

The study stops short of digging into what factors might actually cause the differences between how and why men and women make different decisions, but two things that were clear causes:

• Single women aren’t as aggressive when making offers and negotiating on a house.
• They choose to list their house for less money than a single man would when selling.

They also considered that it could be that single women either choose sub-par real estate agents, or that agents perhaps don’t give the same advice or service to single female clients, but felt there was no evidence to support this:

Basically, it wasn’t possible for them to determine without further study. However, it’s highly unlikely that most real estate agents would treat single women differently than any other client. Agents don’t make decisions for clients; they act on their behalf and carry out their requests after giving them their best perspective and advice. Many clients opt to do things their agent doesn’t recommend, regardless of whether they’re married, single, male, or female.

How to Avoid These Issues

While there is never any way to guarantee how much much of a return you will make on a house you buy, there are two things this study show that you can do as a single woman to avoid making lower returns than single men:

1. Negotiate harder when buying a house.
2. List your house for more than you might be inclined to when selling, and don’t shy away from standing your ground on price during negotiations.

Beyond that, while real estate agents aren’t likely to treat you any differently than a man, or give you worse advice, you should absolutely hire an agent who understands this is an issue and will deliberately try to help you overcome and beat these statistical odds! Just remember: they can only give you their best advice and act upon your direction. They can’t make the decisions for you. So, choose your agent wisely, but also choose to follow their best advice.

The Takeaway:

Single women outpace single men in terms of owning a home, but single men get better returns on their investment. It appears to happen at the point of purchase and sale. Single women tend to offer more when buying a house, and accept a lower offer when selling. Avoid doing those two things, and you should be able to avoid losing out on the gains other single women are missing out on.