Women pay more for mortgages
Single women buy more homes — almost twice as many, in fact — than single men, according to the National Association of Realtors. Yet the cost of their mortgages is higher than men’s. That's not only wrong but counterintuitive. One would believe that since women are buying so many mortgages, the industry would view them as a large block of influential customers and thereby provide them with the best rates and the best terms.
At the heart of this problem is pay inequity. In 2020 women overall earned just 82% of what men made; women of color, specifically, earned even less. So when a woman arranges a mortgage, she may not have as much cash saved as a man. And lower savings means lower down payments, higher loan principals and higher interest rates. In fact, OwnUp, the mortgage comparison company, reports that mortgages cost more for women than men in 49 states; Alaska is the only outlier.
In addition to income and loan equity gaps, a 2020 Yale study found women typically sell their homes for about 2% less than men. Many factors may influence that comparison, including that women typically buy homes sooner in their careers and sell them more quickly when co-buying a property with a life partner; this reduces the time value of their property. Other theories contend that women negotiate less due to biased situations in the bargaining process. And likely one of the most important parts of the analysis is that single mother households are far more numerous than single father households. So women may negotiate less because they want to sell quickly, concerned about the wellbeing of their children.
As we celebrate Mother’s Day, it's a good idea to consider both how far we've come as a nation in terms of women's rights and how far we've got to go to bridge the gender pay-equity gap and the resulting mortgage costs gap. In 2021, we reached Equal Pay Day on March 24 — that's the day in 2021 when the average U.S. woman's pay finally equals a man’s pay—for 2020. That date is much later in 2021 for women of color.