Less than 50 years ago, a woman couldn’t apply for a credit card without her husband by her side. The trickle-down effects of such limitations meant a woman would miss out on building a credit history, taking out a mortgage, and build up wealth on her own.
But since 1974, with the passage of the Equal Credit Opportunity Act, women have taken financial strides in all areas of their personal finances, especially housing, which has allowed them to build more wealth than before.
“We’ve traced homebuying back to 1981 and we know single females are only second to married couples,” said Dr. Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors. “They have been a force in the market since they’ve made a strong preference for homeownership.”
A twist of fates: single women take the lead over single men
Single females make up around 17% of all homebuyers, while the percentage for single men is around 9%, according to the numbers provided by NAR. Married couples are the largest share of homebuyers, making up 61%.
“The other thing we do now see is that more females are attending college, so they are likely to tackle their debt and boost their debt to income ratio,” Lautz said.
Other experts attribute the rise of single women homeowners due to lower mortgage rates. The 30-year fixed mortgage rate stands at 2.99%, just a few percentage points above the record low of 2.88%.
“The decline in mortgage rates have made it more affordable, especially for single women,” said Jeff Tuckers, economist at Zillow.com, a real estate listing firm. “Back in the late 80s and early 90s, the typical share of income that you needed to pay a mortgage was over 20% and — largely thanks to falling interest rates — it has come down significantly.”
Female-only borrowers also own more of their homes than male-only borrowers, helping them to build equity faster. Female-only borrowers have a loan-to-value ratio of 75.07 while the national average for men stands at 77.63, according to the Urban Institute, a think tank based in Washington D.C.
Mindset shifts: “Women are unapologetically building their wealth”
Housing is one of the cornerstones of building wealth, which women now approach with a new mindset than before as they earn more and own more.
“I’ve seen that women are beginning to own their financial future. For a long time, they were considered the half of the relationship that would take care of children,” said Whitney Morrison, director of financial advisory services at LegalZoom, a legal technology platform. “Women are unapologetically building their wealth and gaining confidence, especially the younger generations.”
Women’s wealth is actually growing at a faster rate than men’s despite starting off with less money than men, according to earlier findings from Retirement Plan Advisors.
Women-owned 36% of U.S. businesses, a 30% jump from 2007, according to the study’s analysis of Census Data. But they also noted that women make 50% less money to start off with than their male counterparts.
“Women are working to learn about what they need to earn higher pay, they’re learning to ask for raises and are understanding how to begin investing,” Morrison said. “I’ve seen a huge shift in also how women are much more confident about making decisions.”
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