It would have been nearly impossible to predict the record-breaking year the housing market experienced in 2020. As the COVID-19 pandemic propelled sweeping change and innovation in nearly every industry, consumer habits changed as well. The housing sector saw many consumers seeking out larger homes with ample work or outdoor space, with some relocating or considering homeownership for the very first time; taking advantage of historically low mortgage rates. One homebuying demographic that contributed to 2020's record-breaking origination volume was single women, who now represent the second-largest buying group, falling directly behind married couples in the lead spot, according to the latest research from the National Association of Realtors (NAR).
According to the 2020 Profile of Home Buyers and Sellers, single women buyers accounted for 19 percent of the homes purchased in 2020 - up 18 percent from 2018 - with those in the 65 to 73 age demographic accounting for the lion share, at 22 percent. The median ages for first-time and repeat single women buyers within that same timeframe was 33 and 59 respectively. Single male homebuyers, by comparison, accounted for only 11 percent of purchases in 2020.
This data is unsurprising to those who have been paying close attention to this growing demographic of homebuyers over the years. In fact, single women have held this second-place position since 1981 and theirs is the only group to show an increase from 1981 to 2020. Married couples accounted for 73 percent of homebuyers in 1981 but 61 percent in 2020 (down 12 percent), and single men accounted for 10 percent in 1981 versus 9 percent in 2020 (down 1 percent). Meanwhile, the single–women market segment grew from 11 percent to 19 percent (up 8 percent).
Also of note, Freddie Mac reports that the borrowing profiles for many women are considered incredibly favorable among lenders - highlighting that many women are credit-worthy buyers with higher credit scores and lower serious delinquency (SDQ) rates compared to single men. Now is the time for lenders and services to understand and engage this growing segment of the home buying population.
Why Single Women Are Buying
As marriage rates continue trending downward, women’s commitment to achieving financial security independently is higher than ever before. Women have independence in their life and career choices; that includes choosing to own a home. A variety of motivating factors fuel their buying decisions: the desire to build wealth through real estate, to reach their goal of becoming a homeowner, to create a living space they can call their own, or to relocate following divorce or the death of their spouse. “Today, many women can afford to divorce when relationships end and are perfectly capable paying their own bills and ultimately buying their own home,” says Natascha DeVries, Vice President, Account Management, ServiceLink Flood. “I bought my ex-husband out and kept our home after the divorce and I am not the exception in my circle of friends.”
NAR research places the median age of single female homebuyers at 59. Many of these women have experienced a status change, from married to single, which may provide them with additional funds to use toward a down payment — proceeds from selling their marital home in a divorce, for example. These women may be buying a new residence or investing in real estate to help bolster their retirement funding.
Young, single women are also buying homes as residences for themselves. “I bought my first home when I was 28 years old and single, and it has paid me back tremendously through the years as an investment in myself,” says Bethany Demi, executive sales assistant at ServiceLink. “Without a doubt, real estate and home ownership has been the single biggest factor in increasing my personal financial success and status as a single woman living on one income. Home ownership as a single person has provided stability and personal satisfaction and pride of the accomplishment of what once was an unheard-of thing for single women.”
Meeting the Needs of This Growing Market Segment
What do single women want and expect from their mortgage experience? The same as any buyer: convenience, efficiency and transparency. The biggest difference is that when working with any single buyer, every burden on the customer side falls on that person alone since they don’t have a spouse to share in the logistical details of pulling paperwork together, submitting the application, scheduling and attending the closing, etc.
“When I bought my home, I wanted the support of a lender who could help set me up for success,” says Sarah Kapis, executive communications writer at ServiceLink. “That’s why lenders who have incorporated technologies like EXOS are successfully appealing to single buyers.”
EXOS, to which Kapis is referring, is a technology that empowers consumers to play more of an active role in the process, with the ability to schedule appraisals and closings at their convenience. Designed to connect all parties and promote visibility throughout the mortgage process, the EXOS platform provides the consumer with a profile of the appraiser or signing agent they will be meeting. The profile includes their full name, make and model of their vehicle, photo and contact information. This level of information not only helps to increase consumer’s confidence as the near the closing table, but also provides a sense of safety. EXOS also embeds educational experience into its applications to help reduce complexities for homebuyers.
“Anything a lender or servicer can do to shed light on the process and educate homebuyers is valuable, especially to those going through this process for the first time,” Kapis shares. “When your name — and only your name — is going on that mortgage application, you want the peace of mind of knowing everything is going just right.”