Photo: Robert Clark
Single Americans should consider holding off on homebuying until after they’ve tied the knot. Being single may have its advantages, but it makes buying home more challenging.
A new report by the listing site Zillow has revealed that less than half of all US homes are affordable for the average single homebuyer.
Because of their dual income, couples have a distinct edge over singles when it comes to housing as it will take over twice as long for a single person to save enough money for a 20 percent downpayment.
Nationally, it will take the average single person nearly 11 years to save for a downpayment, compared to 4.6 years for couples. Couples also have more purchase options, as they can afford 82 percent of all the for-sale housing stock. Singles can afford just 45 percent.
To make these determinations, Zillow combined Census home price and income data and made an estimate based on the assumption that both individuals and couples were putting aside 10 percent of their income for a downpayment.
The maximum home value an average couple can afford is $412,736. The average single maxes out at $176,098 — less than the national median home value.
"Nearly two-thirds of Americans agree that buying a home is a central part of living the American Dream, but for unmarried or un-partnered Americans, that dream is increasingly out of reach," Zillow Senior Economist Aaron Terrazas says in the digital release.
Single homebuyers typically have smaller budgets and are competing for lower-priced homes that in high demand but low in supply.
“Having two incomes allows homebuyers to compete in higher priced tiers where competition is not as stiff," Terrazas says.
The national number of homes for sale has fallen nearly 11 percent over the past year, and, at the same time, the number of lowest priced homes has also decreased by nearly 18 percent.
In New York City, single homebuyers are at even more of a disadvantage. It will take the average single nearly 19 years to save for a downpayment. Couples can achieve the same milestone in a little over 7 years.
Some 10 percent of all New York City’s housing stock is affordable for singles. But with two incomes, couples can afford 64 percent of available housing stock.
Singles in California fare even worse with 2 percent of Los Angeles’ housing stock and 1 percent of San Jose’s housing stock being affordable for this group. And, it will take an astounding 31 years for a single in San Jose to save for a downpayment — longer than the lifetime of a standard mortgage.
Meantime, single homebuyers have it the easiest in Indianapolis, IN, where saving for a down payment takes less than eight years, and they can afford 71 percent of the housing stock (the highest share of homes among the largest American housing markets).
Click here to read the entire report.