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Nearly fifty years ago, full-time women workers in the U.S. earned just 62 cents for every dollar earned by men. Though the gender pay gap has improved significantly since 1979, when the data was first available, women working full-time still lag behind men working full-time, on average only earning 83 cents for every dollar a man makes in 2023.
A by-product of this persisting gender pay gap is that single women are at a disadvantage when it comes to home buying. They’ve typically accumulated less wealth—just $58,100 compared to single men’s $82,100—and their lower average annual salary leaves them with less disposable income to put toward a down payment.
As fewer Americans get married, the era of the solo home buyer is taking off. But with women having less cash at their disposal, it’s taking them longer to save up for a down payment. Zoocasa calculated exactly how long it would take for men and women working full-time in 100 cities to save a 20% down payment on the median-priced home (sourced from the National Association of Realtors). The results show that earnings differences play a key role in delaying homeownership for unmarried women.
Men Can Save for a Down Payment 3x as Fast as Women in Some Cities
According to U.S. Census data, women working full-time earn an annual salary of $55,240 and possess an average wealth of $58,100. In contrast, men earn $66,790 annually with an average wealth of $82,100. Assuming that this wealth can be used to help pay for a down payment, men have a $24,000 advantage on top of the $10,000 extra earned in annual income.
The result is that men working full-time can typically save for a down payment twice or three times as fast as women can. In Durham, NC, it would take a working woman 15 years to save for the 20% down payment of $89,680, while a male coworker would need only three years. Of course, these timelines would lengthen if the workers didn’t also have access to the wealth typical for unmarried people, but it still serves as a stark example of the implications of the gender pay gap.
This trend can be seen across the country, with men being able to afford a down payment at least three times faster than women in Fresno, Orlando, Phoenix, Boise City, Austin, and Las Vegas, to name a few. In more expensive cities, such as Miami and Denver, a woman requires over 30 years of saving while a man needs less than 20.
The Wealth Gap Limits Women’s Choices for Affordable Housing
The gender wealth gap provides prospective women home buyers with limited affordable options. When using only wealth ($58,100) to cover the down payment, solo female buyers have enough to cover the 20% down payment in just 22 cities.
Solo female buyers are primarily limited to smaller cities in the Midwest and the South, like New Orleans, Detroit, Cleveland, and St. Louis. Women looking to move beyond those areas can head to Upstate New York, in Buffalo, Rochester, and Syracuse, or Pennsylvania, in Pittsburgh and Harrisburg. But outside of these pockets of affordability, single female home buyers will largely be prevented from purchasing property on the East and West Coasts due to higher home prices.
In comparison, solo male buyers have enough wealth ($82,100) to cover the down payment in 60 cities, giving men a much wider variety of options. Single male buyers have the financial flexibility to choose from warm climates like Tampa and Tucson to big cities like Chicago and Houston. With nearly quadruple the amount of cities to choose from, solo male buyers have the luxury of choice. Meanwhile, solo female buyers may feel restricted.
Despite the economic inequality, single women own more homes than single men, but this has more to do with age than finances. According to PEW research, about a third of all single women household heads were 65 or older in 2022, while in most age groups below 65, single men have higher homeownership rates.
So, what can young women who want to break into the housing market do? One option could be strategic investments. Purchasing a condo or home in a more affordable city, where your dollar goes further, can help you build equity. Alternatively, co-owning a home with a friend, sibling, or other family member allows you to pool your resources together and invest sooner. While living with a loved one might be challenging, owning an investment property together removes the stress of living under one roof and allows you both to accumulate equity.
Do you have questions about buying or selling in your local real estate market? Our agents can help! Give us a call today to speak with an agent in your area and start planning your next real estate endeavor.
The post Saving for a Down Payment? It’ll Take You Twice as Long If You’re a Single Woman appeared first on Zoocasa Blog.
