Single Homeownership Is at Record Levels. Is It for You?
Written By: Jaymi NaciriMonday, March 30, 2020
According to the National Association of Realtors, single individuals made up 25 of home sales in 2019. A whopping 17 of that 25 was single female buyers, many of them older. However, new data shows that single homebuying may be an even more substantial number.
The share of U.S. homeowners who are single hit a record 38.4 in 2018, the latest data available, according to an analysis of Census Bureau data by Haus, said USA Today. The trend largely reflects rapid growth in the portion of Americans who are single. It also highlights an improving economy and job market and the willingness of buyers to set up households in untraditional ways to overcome sharply rising housing costs.
Filter the single homebuying trend down to millennials and the number is even more eye-popping. At a time when a lot of young adults are postponing marriage, the number of Americans buying a house on a single income is substantial, said Investopedia. Ellie Mae says that as many as 47 of millennial homebuyers last year were unmarried.
If youre considering buying while single, here are a few things to think about.
How much can you really afford?
Those who dont even consider the possibility of buying a house as a single person may be waiting because they want to be more settled in their life firstmarried, starting a family, in a job with a solid trajectory, etc. But many people may also think they need more money set aside for a down payment or more income to support a monthly mortgage payment than they actually do.
According to NerdWallet, Most lenders require that youll spend less than 28 of your pretax income on housing and 36 on total debt payments. If you spend 25 of your income on housing and 40 on total debt payments, theyll consider the higher number and the amount you can qualify for will be lower as a result.
When you break down those numbers, it may be that youre already at or above that percentage with rentespecially if youre in a market where its escalating quickly. This new report from Apartment List shows that rent is up 1.7 over last year. This is a modest increase and rent growth is lagging behind the growth in average hourly earnings, they said. However, when renters are paying top dollar for a place that isnt even theirs, and that will likely continue to become more expensive, it creates instability while excluding them from the advantage of equity growth.
Are you prepared for an emergency?
According to experts, qualifying for a mortgage as a single person shouldnt be any more difficult than it would be if you were married, as long as you have the credit, income, and employment history necessary to get approved for your loan. The main challenge of homeownership on a single income is the potential of job loss or some other financial hardship that could put your home at risk. On two incomes, it might be easier to absorb a financial hit. This makes a substantial emergency fund even more crucial.
While the size of your emergency fund will vary depending on your life>
Look to your friends
Just because youre single doesnt mean you have to live aloneor even buy alone. Many singles team up with partners or friends, said USA Today. Unmarried couples made up 9 of home purchases last year, up from 8 in 2018, according to an NAR survey. Other arrangements, such as roommates, comprised 3 of purchases in 2019, up from 2. In some cases, both occupants own the home. In others, one owns while the other pays rent or contributes to household expenses.
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