It’s no secret that buying a home is harder than ever these days, thanks to the combination of higher home prices and higher interest rates on mortgage loans in the wake of COVID-19. For example, the median home sale price for the first quarter of 2023 was $436,800, according to the St. Louis Fed, while the average rate for a fixed 30-year mortgage loan is 6.96% as of this writing (per Freddie Mac). Ouch. With market conditions like this, it’s really no surprise that one group has the edge in home buying.
Married couples dominate the housing market
Per the National Association of Realtors earlier this year, married couples made up 61% of Americans who bought a home in 2022, and also reflected 75% of first-time home buyers, as of data reported at the end of last year. For the sake of comparison, unmarried couples were just 10% of buyers overall, and 18% of first-time buyers.
This is clearly a big discrepancy, so what accounts for it? To put it simply: Higher buying power and the higher likelihood of having a long-term financial plan together.
Why do married couples have the edge?
Even if they never fully combine their finances via a joint checking account, a married couple has a definite advantage when it comes to buying a home. For one thing, the household likely has a higher overall income; according to NAR, first-time buyers who were married couples had an average household income of $79,200. Unmarried couples buying for the first time had a lower average income, at $72,500.
You wouldn’t think that a difference of $6,700 would have such a major impact, but it certainly can. That’s extra money to save for a down payment, closing costs, and the other expenses you’ll incur when buying a home. It also represents more money that can be put aside in an emergency fund to handle surprise home repairs (which are a matter of “when,” more than “if,” when you’re a homeowner).
Another part of the advantage for married home buyers is that generally speaking, when people get married, they tend to form a long-term plan together. It’s always a good idea to discuss finances before you get married, and have regular check-ins about money, to ensure you’re both on the same page. And since buying a home is a major financial goal for a lot of people (along with saving for retirement, paying for kids’ education if you’re a parent, and paying for large purchases like vehicles), it stands to reason that married couples go into homeownership with a plan to buy and keep up with housing payments. There are fewer unmarried couples who can make such a major financial commitment together, based on the data.
How can you make buying a home more achievable?
Whether you’re married or not, this housing market presents more challenges for a wannabe buyer. Here’s what you can do to make it easier for yourself:
- Save, save, and save some more: You don’t actually need 20% down to buy a home (although you’ll save money over time if you do, both in the form of smaller payments and no private mortgage insurance). The more you can save for a down payment, the better, however.
- Work on your credit: The usual “bare minimum” FICO® Score to be approved for a conventional mortgage loan is 620, but it’s best to aim higher to get a better interest rate and have your pick of lenders. Improve your FICO® Score by committing to making loan and credit card payments on time, every time, and pay down some existing debt if possible.
- Shop around: When you’re ready to buy, don’t go with the first mortgage loan pre-approval you receive. Apply with several lenders, and see what offers you can collect. And for that matter, consider different loan types, too.
Don’t be discouraged if you want to own a home but you’re not part of a married couple. Having a spouse may make it easier to buy a home, but it doesn’t mean you have no chance of buying as an unmarried couple or even (gasp) a solo person. It just means you might have to do a bit more legwork to save money and boost your credit score — but when you get the keys to your new home, the hard work will have been worth it.
