Women and home ownership: climbing our way into the market since1974.
Updated: Mar 19
When I was born in 1973, my mother could have legally been denied a mortgage, or even a credit card, without my father (or another male) as a co-signer. That would change in 1974, with passage of the Equal Credit Opportunity Act–for which many thanks go to the late Justice Ruth Bader Ginsburg. Until the ECOA, women (and other marginalized groups) were simply unable to build credit on their own, and were thus barred from participating in home ownership in the US. Now, with 44 years of protection under our belts, how are women faring in the dream of owning a home? Well, the news is generally good and climbing upward, but there are still tough obstacles to overcome. In recognition of Women’s History Month, I’m reflecting on home ownership for women. As I tried to dig deep into this topic, I found that there isn’t exactly a wide body of research on individual female home buyers; most of what I found was initiated by the National Association of RealtorsⓇ (NAR). Research on women as a financial force in our economy is still drastically outweighed by that on men, a reflection of ingrained gender bias in our society; nevertheless, there is a growing body of studies here, and I’ll share what I came up with. According to NAR, single women comprised 20% of all first-time home buyers and 18% of repeat home buyers in 2021, second only to married couples (50% first-time, and 66% repeat). That’s about a 30% rise from 2010, so there’s a significant trend upward in single female home owners. And here’s a local point of interest: A study by LendingTree found that Boston has the widest gender-divided homeownership gap of any city in the US, with 13.5% of households owned and occupied by single women, and just 7.7% by single men. However, just because more women are self-financing their mortgages doesn’t mean they’re getting the best deal. Not only do women in the US make 84 cents for every dollar a man makes on average, women pay more for their mortgages in every state except Alaska. Own Up, a Boston-based mortgage startup, analyzed mortgage payments in every state and compared rates for single men and women. Mississippi, Alabama, Florida, New Jersey, and Ohio were the worst for single females, with up to a $7,000 increase for women over the course of a 30-year fixed mortgage. What could a single lady do with $7,000? I’ll let you mull that one over. And even in the least divergent states, which include Maine, Wyoming, Montana and Oregon, single women are paying up to $1,000 more than single men for their mortgage as a whole. And despite this disparity, women are still less likely to default on their loans! I mean, let’s give these ladies some credit, literally AND figuratively! If you’re a woman thinking of buying a home, you may be wondering what your obstacles are, or perhaps you’re up late thinking about them! And while I’m highlighting these barriers for women, these may apply to any potential home buyer as well. My research came up with these obstacles:
Little to no credit history
Lenders won’t give you a mortgage if you haven’t built up evidence that you’re a good bet to lend money to. Especially for younger people, it’s important to build up credit as soon as possible (as early as age 18). Even if you get a credit card with a low balance, use the card and pay it off every month. This shows a lender that you’re capable of paying your debts. If you already have a credit card, contact your bank and ask if they’ll raise your line of credit. Lenders compare how much credit you have access to with how much credit you’re currently using. A higher credit limit, combined with paying the card down each month, will build good credit. Poor credit Everyone has tough times, and occasionally your credit score will go down because of missed payments or other reasons. If you have a low credit score, contact any of the three major credit bureaus: TransUnion, Equifax, or Experian, and ask what you can do to improve your credit. These companies also have online articles that give expert advice. Not enough saved for a down payment Even if you’ve built up some good credit, you’ll be hard-pressed to win a bid on a home, especially in the Cambridge/Somerville area, if you don’t have at least a 20% down payment. This means you need to start saving as early as possible (you can start even before you’re old enough to get a credit card). If you’re motivated and disciplined, you can set a little aside after each paycheck in a separate savings account. If you’re less motivated, you can use an automated savings option that many banks offer these days. While it is possible to get a mortgage even if you have less than 20% for a down payment, there are additional complications and requirements if you go this route. Find out more here. Mortgage is higher than rent. Maybe? Oftentimes it feels cheaper to rent, and it’s true that sometimes your monthly rent would be less than a mortgage payment. But that’s not a reason to write off owning a home if it’s truly a goal of yours. Take the time to look at the whole picture, including utilities, services, location, and possible return on your investment. You can read articles online, borrow books from the library, or even speak with a financial planner to help you make an accurate calculation. Maybe in the long run, you would be paying more for a mortgage than renting. But you’ll never know until you do your research. Buying a house is hard! It sure is! That’s what buyer agents are for. I’ve been working to support Liz and Ellie’s partnership for many years now, and they helped me sell my condo and buy a single family home a few years ago. Of course I love Ellie and Liz, and I think they’re the best, and that you should hire them, but any buyer agent will help you buy a home and you do not pay them any money. I will say that again, because I certainly didn’t understand this before: buyers never pay their buyer agent any money; they get paid by the seller! They support you every step of the way, connect you to knowledgeable lenders, attorneys, and other professionals, and make sure your interests are being protected. If you’re not sure where to start, call a buyer agent. Go here to contact Liz and Ellie. Women have come a long way since the 1970's when it comes to homeownership . Yes, there are still barriers, and I’d like to see a significant increase in affordable housing, improved access to credit for younger people and/or those dealing with poor credit, and a ramping up of education for first-time home buyers. This March, I’m celebrating the progress made since I was born in 1973, but I’m looking to the future for even more equity in housing for women.