Single women own more homes than single men but get lower returns — here are 5 expert tips to change that

Homeownership is key to building wealth, but for single women it doesn't come so easy. Though homeownership among this demographic has grown in recent years, research also suggests that their homes aren't providing as big of a financial return as they are for single men.

Between 2016 and 2022, the share of single women homeownership has been between 17% to 19%, compared to the range of 7% to 9% for single men, according to the National Association of REALTORS®. Yet single-women homeowners are losing out more on their housing investments.

CNBC Select examines why single women are getting less bang for their buck when it comes to housing, and we offer some advice from experts on what they can do to even the odds.

The average single-woman homeowner loses approximately $1,600 each year in wealth accumulation in their housing investment relative to single men homeowners, as detailed in a 2023 study published by The Journal of Finance. Titled "The Gender Gap in Housing Returns," the study examined data from over 50 million U.S. housing transactions between 1991 and 2017 and controlled for demographics like income and education.

Given the average length of time homeowners stay in their homes is 13 years, that gender gap in housing returns adds up to $20,800. The study also estimated that this gender gap in housing returns makes up for approximately 30% of the overall gender gap in wealth accumulation come retirement.

It wasn't until the Equal Credit Opportunity Act passed in 1974 that single women had legal protections when getting a mortgage to buy a home. Before then, banks could legally refuse loans and credit to unmarried women — or, in the case of married women, they were required to get their husband's permission.

Almost two decades later during the early 1990s, sexism remained entrenched enough in real estate for a loan officer to tell Cary Carbonaro, now a successful certified financial planner (CFP), that banks didn't like single women buyers when she went to buy her first house as a single woman.

Single women start losing out on their housing investments at the point of buying and then again when selling. The two potential key drivers of this are market timing and negotiation, says Kelly Shue, co-author of "The Gender Gap in Housing Returns" study and professor of finance at Yale School of Management.

Market timing

In regards to market timing, single men have better market timing (more likely to buy a house when prices are low and sell when high). That's inpart because single men are less likely than single women to act as primary caregivers for a child, and therefore have more flexibility when it comes to housing decisions, Shue explains. "I don't think it necessarily means women don't understand housing cycles," she says.

For Erica Davis, who herself works in the homebuying industry as a loan officer for Guild Mortgage, a mortgage lender and advisor, in Myrtle Beach, South Carolina, this hits close to home. Davis recently closed on her first house as a new single woman after a divorce, but she was forced to secure a new home in a very short period of time when a buyer approached her and her now ex-husband — and her new home had to be near their kids' middle school, she tells CNBC Select.

"The kids had to go to the same school district they're in; [switching school districts] just wasn't an option for me," Davis says. "I didn't want to put them in an uncomfortable situation."

Negotiation

Timing isn't the only factor that holds back single women homebuyers. "The Gender Gap in Housing Returns" looked at repeat sales of the same property and found that after controlling for market timing, women buy the same property for approximately 1% to 2% more than men and sell for 2% to 3% less. This leaves a gender gap that is mostly then explained by negotiation.

Women choose to list their homes at lower prices, thereby making the first offers they receive naturally lower. "Men are much more aggressive when listing and they benefit from that," Shue says. Women also offer larger discounts when selling (and negotiate smaller discounts when buying). The study found that, "Female sellers and male buyers are associated with the largest negotiated discounts relative to the list price, while male sellers and female buyers are associated with the smallest discounts."

The strongest evidence of bargaining power, Shue points out to us, is in very hot housing markets like the Bay Area or New York City. When there's not much room for negotiation and people just submit bids, women perform the same as men. "[When the] negotiation channel is shut down, there is no gender gap anymore," Shue explains.

And it's not that women make negotiation mistakes or have less negotiation ability. Instead, they're penalized more than men for using hardball tactics. "The other side [in the] negotiation punishes women more for aggressive negotiation tactics," Shue explains, adding that if the negotiation results in a deal for anyone, the woman typically gets the short end of the stick.

The unequal negotiation outcomes for women can sometimes result in men being cautious of having a female agent represent their homebuying or selling decisions in the first place. "I've had one client, an older gentleman, who was so appreciative of my help but did tell me that he wanted to work with a male lender, not a female," Davis says, recalling a recent interaction with a potential client looking to purchase a home. "I didn't want to push the subject and he was very appreciative of the help, so I thanked him, told him I'm here if [he] needed, it was already uncomfortable."

Shue's study references more research on gender differences in the "style and willingness to negotiate," which illustrates women having more negative outcomes when negotiating in laboratory, labor market and automobile market settings. In studies where females followed the same car-buying negotiation scripts as male buyers, they still received worse counteroffers when negotiating. "The other research has shown even when men and women employ identical negotiation tactics, the women just get worse outcomes," Shue says.

Perhaps, the study concludes, women take into account a fast, low-risk and non-confrontational negotiation process when house hunting. The study also does point out, "The root causes of gender differences in market timing and negotiated outcomes may be complex and deserve further research."

The odds may seem stacked against single women homeowners because of inequities created by traditional gender roles, but single women can still take action to try and get the most wealth out of their homes.

1. Feel OK negotiating

Since negotiation is likely to be a significant driver of why single women are getting lower returns on their housing investments, it's crucial to make an effort to recognize how much the negotiation process really matters to the bottom line, Shue argues.

Leah Jones, a CFP at wealth management firm Hightower Bethesda and financial expert volunteer for nonprofit Savvy Ladies®, advises single women to be comfortable with the fact that, at the end of the day, it's a negotiation and it's ok to say no.

"In general, women are taught from young ages to accept what they're given versus the mentality [of], 'I'm going to ask, I'm going to push, if I'm told no, I'm comfortable walking away; those drivers go into buying a home," Jones says.

2. Make sure your real estate agent is in your corner

For those who may feel uncomfortable negotiating or asking for a better price, make sure the realtor you hire knows this and has your back. "When finding a realtor, if you don't think you can drive the [homebuying or selling] deal yourself, hire someone who can and tell them that," Jones suggests.

Single women can tell potential realtors, "Hey, I'm really looking to you for guidance," and ask specific questions before they commit to them, such as how the realtor has handled negotiations in the past and how they advise someone to walk away when not in their best interest.

3. Talk to others

Buying a house will likely be the most expensive purchase you make in your lifetime, which means it should also be one of your most well-researched decisions. While doing your due diligence, talk to others who've successfully bought a house, advises Jones. "Ask for help and guidance…[ask] what has been good and what has been bad," she says.

Women should feel comfortable talking about investments they're making with peers, friends or family and leveraging resources around them so they know if they're paying over asking or selling for less.

4. If market timing is bad, consider renting even for short

Single women can try to avoid buying during a less-than-ideal market by temporarily renting.

If you have to move somewhere for a good school, for example, consider renting a condo to buy yourself more time and negotiate a short-term lease. "That flexibility offers them a much better purchase price [when it comes time to buy a home]," Jones says. "The timing is a powerful component for buying a home and you want to be in a position of power over weakness."

5. Keep your house for longer periods of time

If women do worse when selling and buying than single men, as "The Gender Gap in Housing Returns" study shows, to the extent that women can, then they can try to "transact" less to incur that cost less and reduce their financial disadvantage, Shue points out.

Think of buying and selling a house similar to buying and selling a stock (before the invention of no-fee brokerage accounts), where each time you trade you pay a fee; for women, however, their fee is higher. "It's only when they transact they lose an extra amount," Shue says. You should "trade" your home less often to limit how much wealth you lose compared to single men.

According to the study, "The gender gap in annualized returns converges toward zero as holding length increases. Homeowners with longer tenure in their properties 'trade' assets less often, so any advantage or disadvantage in execution prices will matter less for their annualized returns."

In other words, the longer a single woman owns a home, the less her financial disadvantage when she buys and sells matters since her annualized returns are divided over a greater number of years.

The study also identifies "iBuyer" (aka "instant buyer") technology, which handles housing transactions quickly without negotiations, as an innovative way to help narrow the gender gap in the future.

It's certainly not up to the female population to fix this gender gap and gender bias in real estate. But single women can take action to put themselves in the best position possible when going to buy or sell a home.

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