Americans invest in real estate more than they do the stock market, making homeownership one of the key contributors to household wealth. It’s also a way that families build generational wealth, a wealth that hasn’t always been easily accessible to women and people of color. And studies find that people who own affordable homes have more discretionary income for important goals such as paying off debt, saving for education, or starting a business. Yet because women are less likely than men to own homes, women are at a disadvantage when it comes to building wealth. The homeownership rate among female-headed households is 61% compared to 67% among male-headed households as of 2019, resulting in a gap of six percentage points. However, this can be seen as promising news, because in 1990, the gap was much larger—20 percentage points. “As women made gains in higher education, access to full-time employment, higher pay, and higher income positions—as well as with more households now identifying as led by women—this homeownership gap has shrunk over the last few decades,” Eric Maribojoc, executive director of the Center for Real Estate Entrepreneurship at George Mason University, said in an email to The Balance. Although trends in recent data are encouraging, they don’t tell the whole story about the homeownership gender gap. For example, women are paying approximately 2% more for homes, and selling them for about 2% less, said Holly Danko, chief people officer at home co-investing company Unison, in an email to The Balance. That data comes from a 2020 Yale study, which found that single women lose around $1,600 per year relative to single men on the same house.
Causes of the Homeownership Gender Gap
One major factor in the disparity in homeownership is the pay gap that also exists between men and women, according to Christian Mills, home equity conversion mortgage specialist at Reverse Mortgage Funding LLC. As of 2020, women typically earn 84 cents to every dollar a man earns in median hourly earnings in part- and full-time positions. “This means women may have less income for homebuying than their male counterparts, and that when they do buy homes, they may be less expensive or in less affluent areas,” Mills said in an email to The Balance. The wage gap is wider for women of color. Black women earned 64 cents for every dollar earned by a white, non-Hispanic man in 2020, despite having some of the highest labor-force participation rates. Hispanic women see the largest pay gap, earning 57 cents for every dollar earned by white, non-Hispanic men. Additionally, out of the approximately 11 million single-parent families with children under the age of 18 in 2021, single mothers headed close to 80% of them. Single fathers, on the other hand, have higher incomes and are far less likely to be living at or below the poverty line, on average. Similarly, women face disproportionate caregiving responsibilities for elderly parents and other adults, preventing them from investing time and financial resources into homeownership at the same rate as men. Lower lifetime earnings among women not only results in less money to put toward a down payment on a home, but it also leads to higher debt-to-income ratios and worse credit scores, which can make women less likely to qualify for affordable home loans.
How the Homeownership Gender Gap Impacts Women
Mills said that owning a home not only is a cornerstone of the “American dream,” but also a basic building block of wealth building. However, another gap persists here as well: The median woman’s wealth is equal to 55 cents for each dollar of male wealth. “Owning a home means not only providing a place for you and your family to sleep at night, but also owning an asset that has increased in value at a steady pace,” Mills said. “Plus, owning a safe and stable home greatly increases the chance of someone creating upward economic mobility for themselves and their family.” That’s because the stability homeownership provides makes it easier to focus on things such as education, improving job prospects, and forming a network or community to support you. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
