As recently as 2007, only 30 percent of all homes purchased within the United States were bought by singles. Out of this number, less than a third were single men. These statistics beg the question: why? Single buyers are offered the same tax breaks as couples. They also stand to make the same profit off of investing in a home. Yet, single buyers are a minority in home purchases.
The Risks
Part of the reasoning behind this is the extra risks that purchasing a home alone entails. If the purchaser is sick and cannot work, the mortgage cannot be paid. Single buyers also have to cover the entire cost of the down payment and mortgage on their own. In a market that no longer allows for no-down payment loans, single buyers are faced with a huge financial burden as they seek to save money to pay on their down payment.
Buyers in general also drastically underestimate the cost of owning a home. The roof may need to be replaced or the walls may be eaten by termites. With all of these unprepared for costs, the single person is at a significant disadvantage. All remodeling must be done on one wage. Even if the fixes are done by the home owner there will still only be one person doing the work.
When disaster strikes, having two heads to figure out a solution is better than one. Couples who buy a home have a miniature support network when things go wrong that a single person just does not have.
Why Buyers Should Get in the Market
Today, the country is faced with a buyer’s market. Unfortunately, many people do not have the income level to take advantage of it. In tough economic times, buying a house is a luxury that few can afford. Yet, at this time period more than any other, buyers should get into the marketplace.
The news constantly reports on how a house is now a liability, but what they ignore is the historic rise in home values. If someone is willing to wait 20 or 30 years, the value will rise higher than inflation. Buying a house is still an investment and even if home prices fall, the user still has a property that can be sold. Over the course of their home ownership, they can deduct the mortgage’s interest. Once the home owner sells it, they receive the money they paid back—at least if they waited long enough before putting it on the market.
A renter will never get the money they paid for rent back. They will also never get to take advantage of the tax breaks involved. Yes, there is always a risk in making a home purchase. Any choice carries a risk—even crossing the street holds the risk of getting hit by a car. Just because there is a risk does not mean a home purchase should be afforded. History shows that an investment in a home will pay off.
Why Don't Single People Invest?
Covering the cost of a down payment and the monthly mortgage is a significant barrier for single individuals. Some people may not want a home as well. If someone is constantly traveling for business or moves every few years, buying a home would be a folly.
One interesting part of the data is the difference between female and male singles. “Experts” say that women are nesters and males want to not be tied down to anything. In reality, it may have more to do with the gender’s respective investment styles than with their desire to nest. Women have been noted as significantly more cautious investors. Interestingly, because of this trait, investments by women pay more on average in the long term than the ones chosen by males.
Out of all investments, a home is almost as safe of a choice as a government bond. The current housing crisis excluded, home properties will buy. Unlike stocks, there will always be the property there. The neighborhood may change and the home value may as well, but there is always something tangible to be sold. In tough times, a home can have rooms rented out to cover the costs of rent.
Too much information is in the marketplace today about the dangers of buying a home and the losses people incurred. If the homeowners had not been paying on their mortgage, the money would have disappeared anyhow in the cost of rent. Once this amount is subtracted from the homes purchase value and tax breaks are accounted for, the home does not have to sell for very much for the owner to make a profit. It is the smart individual who realizes this in today’s market and takes advantage of it. If a single person can convince a bank to give them a loan, then purchasing a home can become a reality and be the first step toward building a strong future.
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