Women’s Housing Gap | Expert Tips to Help Close It

Guest Post by Victoria Araj

Buying a house is a difficult, often lengthy, process that requires buyers to consider numerous logistical factors; all while dealing with the emotional stress of making one of the most significant financial transactions of their lives. For a buyer to get the best price on a home, it's extremely important they understand the makeup of the market.

There used to be a very particular demographic majority of home buyers: married couples, often with children. The landscape has evolved through the years, however, and more single people are purchasing homes. In fact, single women purchase more homes than single men – though a Yale study revealed those women see a lower return on investment compared to men. This inequality is especially concerning when considering how this financial difference can play out later in life at retirement age.

This disparity is known as the women’s housing gap. In this piece, we’ll cover what it is, why it may exist, why it’s significant, and how we can work to close it.

What is the women’s housing gap?

The women’s housing gap is the difference that single men and women see when buying and selling their homes. The Yale study revealed that single women pay about 2 percent more than men when buying a house, yet sell it for around 2 percent less. That’s an average of $1,600 per year that single women are losing out on, in comparison to their male counterparts in similar homes. The actual difference varies depending on the cost of the house and additional factors. Interestingly, the study showed no difference when women bought from and sold to other women.

Possible reasons this gap exists 

Some potential reasons that may explain this gap include differences in negotiation results and market timing, as well as looking at the wrong factors when evaluating the value of a home. A number of studies have found that women are less likely to negotiate. A more recent study challenges that idea — finding that even when women ask for just as much, or more than, men, they still receive less. This suggests that if women want to achieve equal or better results, they have to surpass their male counterparts through higher-caliber negotiation skills.

The Yale study also suggested that single men had better market timing than single women, providing a better ROI on their home. It is important to note that women may not have as much flexibility when selecting a home if they happen to be single mothers. This group may end up overpaying for a property because they need to quickly provide shelter for their children. While this also applies to single fathers, single mothers outnumber their male counterparts in the United States, which could make it a factor to consider when evaluating this gap.

Why it matters

Property investments are one of the most frequently mentioned ways to build wealth. As a result, the lead Yale researcher also suggested this difference in real estate returns could contribute to the gender wealth accumulation gap at retirement age — which can affect quality of life and the ability to pay for increasing medical needs.

We should be pushing for equity on every front. One of the best things women can do to improve their outcomes in the home buying arena is to educate themselves, so they can stand their ground and get the best value when purchasing their home and the highest price when selling. 

10 tips to help decrease the gap  

While no one can control another’s’ biases or actions, you must position yourself for the best chance of success by doing thorough research and working to improve negotiation skills. Here are 10 tips to help you achieve a more positive home buying experience and outcome:

1. Be familiar with your rights

Know your rights so you can recognize when someone is engaging in discriminatory practices. Being able to identify this can protect you from being taken advantage of when buying a home. Rights vary by state, so you can visit your local Housing and Urban Development (HUD) site for more information.

2. Build your credit score 

Improving your credit score can help you secure a great mortgage. It’s important to build good credit before applying for a loan so you can get the best interest rates. Lower interest rates will result in lower monthly payments and an improved cash flow. In order to improve your credit score, make payments on time, stick to a realistic budget, and look into credit repair services if needed.

3. Seek professional advice 

Talking to a mortgage specialist can help you make informed decisions when buying a home. To make the most of their services, come prepared with mortgage questions such as “How much home can I afford?” and “What is the interest rate and the annual percentage rate?” Try writing out your list beforehand so you don’t forget any important questions.

4. Focus on investment potential, not aesthetics

It’s easy to get caught up in a property’s appearance when you visit it or see a property online. Try to set that aside and consider whether the house can be renovated to boost its value. Disregard changeable things like wall color or kitchen counters and focus on elements like location, home safety and structural integrity. 

5. Take statistics into account

To discover the true value of a home, look beyond the home itself. When evaluating a home, consider the area’s job and population growth, unemployment rate, school district, and historic price increases for homes in the area. You’ll likely maximize your profits if you’re able to land a property while the neighborhood is still up and coming. Look at year-over-year changes as opposed to just viewing current stats.

6. Research comparable sales 

Researching comparable properties can provide you with a better idea of a fair price for the house you’re looking at so you don’t overpay. You may even stumble upon better-valued properties that pique your interest. Look for properties of a similar size, location, number of rooms and big-ticket amenities (i.e. pool, over-sized garage, etc.).

7. Get a professional home inspection 

Always pay for a professional home inspection. It will allow you to ascertain any existing issues. This helps you identify potential repair costs, allowing you to negotiate the sale price to account for serious repairs that need to be completed. Skipping or skimping on your inspection is not an option — those who have, deeply regretted doing so.

8. Understand the seller’s motivation 

Understanding the seller’s motivation helps you tailor your negotiation tactics. Doing your research can provide you with information about how badly the owners want to sell and how much you can negotiate the price down. For example, try a public record search — you may discover insights into how quickly the seller is trying to move as well as the reason behind their relocation. 

9. Use targeted negotiation tactics

Equip yourself with a variety of negotiation tactics so you can adapt your strategy to fit the specific market, property, seller and their personal situation. Come prepared with your completed research of comparable listings, sales and exact numbers to show you’re informed. You should also know your max price ahead of time. Depending on the situation, you may want to start 15 percent below that top number. Consult with your real estate agent, who has detailed knowledge of the area, to decide the best negotiation strategy.

Negotiation tactics to add to your tool kit:

• Tailor wording to the seller’s individual situation 
• Include a personal letter detailing why you would like the house
• Support your claims and offers with statistics and data
• Find ways to save money in places other than the house’s price
• Use home inspection findings to your advantage
• Begin negotiations around market value, not asking price
• Aim for a reduced price by offering to close quickly

10. Show you’re a serious buyer (but know when to walk away)

Make it clear that you have the resources to purchase the home and are ready to act quickly. This can help expedite the home buying process. On the other hand, you don’t want to come across as too eager. It’s a fine line to walk because while you want to show that you are a serious buyer, you should also keep a healthy emotional distance. Be prepared to walk away from the home should the negotiations surpass what you’re willing to spend. Remember that there are other viable options out there!

The bottom line

The women’s housing gap can put women at a financial disadvantage and limit their opportunities. To combat this gap and achieve better outcomes, women should stay informed, conduct ample research, practice negotiating ahead of time, hold their ground, and know when to walk away.

For more tips on home buying and information on the women’s housing gap, check out the visual below (provided by Rocket Mortgage):

Victoria Araj is a Section Editor for Quicken Loans and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.