Single female homebuyers represent growing market

With home purchases over a three-year period totaling more than $550 billion, unmarried women represent a growing - yet sometimes overlooked - segment of the homebuying population.

A recent report from Harvard University's Joint Center for Housing Studies (JCHS) examines this distinct group and their purchasing behavior. The findings are "striking," according to research analyst Rachel Bogardus Drew, the author of "Buying for Themselves: An Analysis of Unmarried Female Home Buyers."

The role of unmarried women in homebuying is clearly strong and shows signs of continued growth and expansion, Drew reported.

"Not only are unmarried women a large segment of the homebuying population, but they are fast-growing, too, increasing their share of homebuyers by 50 percent in eight years," she stated.

Along with looking at the characteristics of unmarried women relative to other buyers, the researcher analyzed home-purchasing behavior and preferences and identified four subsets of this diverse and highly segmented group.

Of 18 million homebuyers in the study (defined as purchasing their home in 2000-03), 3.7 million (about 20 percent) are identified as being headed by an unmarried female. Of these, about 1.5 million purchased their first home.

Challenges of affordability

The unmarried-female-buyer segment experiences much greater incidences of housing-affordability problems, researchers note. Such problems may be the outgrowth of various demographic circumstances, including the fact that unmarried female buyers tend to be older than married and unmarried male buyers.

Also, this group has relatively higher shares of minority buyers and purchasers with lower incomes.

Unmarried women buyers are far from homogeneous, Drew emphasized. The segment encompasses women of all ages and races, single mothers, widows, divorcees, women living alone and those living with other adults.

Nearly half live alone, and another 30 percent are single mothers. One-quarter of female buyers are minorities. Previously married women account for about two-thirds of unmarried female buyers.

The JCHS report attributes the growing interest in unmarried female homebuyers to several realities:

* There are more unmarried women in the population than in the past (in fact, the number increased 20 percent just in the last decade).

* The average age of a woman's first marriage is rising, up from 20.8 in 1970 to 25.3 in 2003.

* Fewer younger-adult women than men choose to live with their parents, opting instead to form their own households.

* Recognition of the economic upside of homeownership and corresponding erosion of the stigma once attached to women taking control of their financial and housing situations.

* The growing proportion of divorced women who have previously owned a home and participated in equity accumulation.

Affordability and purchasing power are concerns for this segment. More than six of every 10 female buyers earn 80 percent or less of their local area median income, which compares to 49 percent of men and only 26 percent of married couples.

Nevertheless, Drew noted, a subset of unmarried women do have significant incomes and purchase more expensive homes. Nearly 40 percent are middle-aged and more established in their careers and incomes than their lower-income counterparts.

Housing needs vary

Not surprisingly, housing needs vary with different living situations, financial resources and preferences.

"Relative to married couples, unmarried male and female buyers are more likely to purchase in central cities than in suburban areas," Drew stated.

Fifteen percent purchased a condo, slightly more than the 12 percent of unmarried men who chose this property type.

Choice of location also reveals noteworthy distinctions. Unmarried women are more likely than other buyers to choose their location based on proximity to friends and family and less likely to do so because of proximity to work or school.

Drew said they are also more likely to compromise on the size and cost of their home to get the attributes most important to them, and less likely to compromise on location or neighborhood quality.

Segment appreciates advice

Unmarried women are slightly more likely than unmarried men and married couples to seek out the services of a real estate agent or broker, and less likely to use the Internet in their search process.

Anecdotal evidence suggests they are "highly loyal to professionals they feel helped them navigate the homebuying process, and more likely to recommend those professionals to their friends."

The report isolated four subsets of unmarried women (single mothers, young singles on their own, middle-age singles and seniors living alone) who exhibit distinct approaches to the homebuying process. A fifth category, women living with other adults, was deemed to be too heterogeneous to characterize with shared characteristics.

Drew's research shows unmarried female-headed households represent 30 percent of all households, but only 23 percent of all homeowners and 20 percent of recent homebuyers. While this sometimes-overlooked segment is starting to catch the attention of real estate professionals, developers and financiers, the existing stock and traditional housing arrangements fail to meet the needs of changing compositions of households.

"Clearly, there is room to grow within this market," Drew concluded.

The full 27-page report may be viewed and downloaded at www.jchs. harvard. edu.[[In-content Ad]]