Why more women are buying homes alone

More and more single women are buying homes on their own these days, while others are becoming solely responsible for their houses after a divorce, the death of a spouse or other relative. But for all these women, home ownership has its share of challenges and rewards. So, in a special week-long series called “Today's Money for Women,” Jean Chatzky, “Today” financial editor and Money magazine editor-at-large, discusses women and home ownership. In day one, Chatzky talks about why women are going it alone.

You've probably heard that thanks to divorce and the fact that women outlive men, 90 percent of women will be solely responsible for their finances at some point in their lives. Now a new study conducted on women and homeownership by Matthew Greenwald and Associates for Sears, Roebuck & Co. notes that almost as many as that will be solely responsible for their homes at some time in their lives. That means they are responsible for the upkeep, the maintenance, and of course the bills. But, Fannie Mae estimates that by the year 2010, there will be 31 million women-headed households in the U.S., nearly 28 percent of total households.

Why are so many women buying or interested in buying?
We want financial security

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Owning a home has also become a keystone of a long-term financial strategy, particularly for women, explains Kermit Baker, senior economist with Harvard University's Joint Center for Housing Studies. Over the last few years particularly, as the stock market has been rocky, real estate has continued to appreciate. It has also been less volatile — although not as fast growing — over the long term.  That's a big deal, particularly to women who worry more about finances than men do.

We fear being homeless
Despite the fact that many women have successful careers, there's still a fear of being homeless. They are however active investors. The vast majority of low- and below- income seniors in this country are women.  Putting money into a mortgage every month is like a guaranteed savings account coupled with a guaranteed place to live.

There's less of a stigma to striking out on our own

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According to the National Association of Realtors, single women are not only the fastest growing segment of homebuyers, they account for one-third of all condominium purchases and they're buying a greater percentage of second homes than ever before.  Twenty years ago, a woman might have said, “I think I'll wait until I get married.” Today that's not the case.

We get an emotional boost
And there's good reason for this. Research from the Harvard Joint Center for Housing Studies shows homeowners are likely to stay in their homes longer, participating more in community service and political activities. And according to the Homeownership Alliance, children of homeowners are likely to perform higher on academic achievement tests, more likely to finish high school and have fewer behavior problems in school.

Should you buy?
Are you planning to stay put for three years or more?
If you're not planning on living in the same place for at least three years — the cost of moving, the cost of buying and selling coupled with the fact that many economists suspect we are facing regional housing bubbles — makes renting a smarter move.

Are you willing to maintain it?
Owning a home is more work than renting. When someone else is the landlord, you have someone to call when the plumbing breaks, when the refrigerator breaks and someone else to maintain the lawn. 

Can you afford the sort of place you want?
One problem we've seen over the past couple years of low interest rates is people buying more home than they can afford. They strap themselves with a mortgage payment that stretches them to the limit — don't budget for maintenance — and when the first thing goes wrong with the home, they're in over their heads.  If you can't afford the sort of place you want to buy — with a loan that does more than pay your interest — you may want to wait until you can put down a more substantial down payment.

Is your credit in decent shape?
Unless you have a credit score of 660CK or above, you'll pay above average rates to finance your purchase. Check your credit score at myfico.com before you start looking around and figure out if it needs work.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Copyright © 2004. For more information, go to her Web site, www.JeanChatzky.com.

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