Why Are These Men’s Home Values Higher Than Women’s?

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It turns out the gender pay gap affects more than just a woman’s ability to make as much as a man. Studies show it also has an impact on how much money women are able to save, and, most recently, how much value a woman’s home as a single buyer might have.

A new analysis by RealtyTrac shows that homes owned by single men are valued 10% more on average than those owned by single women. The men’s homes also have appreciated 16% more since purchase than those owned by women.

The analysis covered more than 2.1 million single family homes nationwide owned by either single men (1,139,493) or single women (1,011,572) based on public record tax assessor data collected by RealtyTrac.

The homes of single men had an average market value of $255,226, while those owned by single women had an average market value of $229,094.

The single men’s homes analyzed also had an average appreciation of $63,921 since purchase (33%), while the average single woman’s home value increased by $53,809 (31%).

Click on the infographic for a larger version.

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“Women earn less than men on average — 19% less in 2015, according to the Bureau of Labor Statistics — giving them less purchasing power when it comes to buying a home,” said Daren Blomquist, senior vice president at RealtyTrac. “So it’s not surprising to see the 10% gender gap in average home values between single men and single women homeowners; however, the slower home price appreciation for homes owned by single women demonstrates that less purchasing power is also having a domino effect on their ability to build wealth through homeownership as quickly as single men.”

RealtyTrac’s analysis also found that, among homes owned for at least 15 years, those owned by single men on average had a current market value of $288,912 — 17% higher than the average current market value of homes owned by single women: $240,166.

Among these older homes, the men’s gained an average of $170,765 since purchase — a 145% return on purchase price. That’s an appreciation of $36,496 more over the average $134,269 gain since purchase seen by single women over that same time period.

Where the Housing Gender Gap Is Biggest

The analysis found that the average value of single men’s homes were highest compared to single women’s in the District of Columbia (14%), followed by Florida (12%), West Virginia (12%), Wisconsin (12%), Texas (10%), and Alabama (10%).

There were three states where the average values of homes owned by single women were higher than the average values of homes owned by single men: Massachusetts (11%), Kentucky (2%), and Kansas (1%).

Regardless of your gender, bad credit can keep you from owning your own home. Consumers with scores below 620 can have a tougher time securing financing. That’s a common credit score benchmark for government-backed loans (Federal Housing Administration, U.S. Department of Veterans Affairs and the U.S. Department of Agriculture), while conventional lenders might want a score that’s closer to 640 or 660.

Different lenders can have different credit score cutoffs, however. But even if you clear a lender’s baseline, working hard to improve your score may also help you nab a better interest rate. You can monitor your progress by getting your free credit report summary each month on Credit.com.

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The Thing That Can Add $5K of Value to Your House

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Becoming a homeowner is still the American Dream for many people. You apply for a 15- or 30-year mortgage and add as many home upgrades and improvements as possible. In addition to hoping it’s a seller’s market when you put the ‘for sale’ in your lawn, those home improvements determine how much profit you stand to make from your investment.

One of the best investments you can make is fireplace installation, according to a recent study from Angie’s List. The company surveyed 100 real estate agents on home values in relation to fireplaces and 2,000 homeowners/homebuyers and found that fireplaces are a pretty hot commodity.

The majority of potential homeowners in the market today see fireplaces as an asset. They top so many homebuyers’ must-have lists and are in such demand, in fact, that fireplaces increase over 76% of homes’ value anywhere from $1,000 to $4,999. The study has one caveat – electric fireplace inserts aren’t nearly as desirable as wood-burning or gas-burning fireplaces.

Without much variation, the wood-burning option was favored by all age demographics. Specifically, of those aged 22-29, 58.82% preferred wood burning, with those aged 30-39 close behind at 57.89%. Meanwhile, those in the 40-49, 50-59 and over 60 age groups favored wood-burning fireplaces at 63.04%, 65.35% and 67.31%, respectively.

Adding a fireplace may add value to your home, but it will come at a price too. If you’re looking to make a home improvement, make sure you understand your financing options. Home equity lines of credit (HELOC), personal loans and/or credit cards are often used to help homeowners with remodels, but they all come with different terms, benefits and pitfalls. For example, a credit card may have a higher interest rate than a HELOC, but if you default on the credit card debt, your home won’t be in jeopardy like it would with the HELOC. No matter which option you pursue, you can check your credit score for free on Credit.com beforehand to see which options and interest rates you’ll qualify for. And if you spot errors on your credit, disputing them can get them fixed quickly.

[Offer: If you’re trying to buy a home and are worried credit report errors are holding you back, you can hire companies – like our partner Lexington Law – to manage the credit repair process for you. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

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Homeowners Have Something to Be Happy About Again — Their Home Values Are Rising

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American mortgage holders are optimistic that equity in their homes is rising, and that’s helping fuel— for better or worse — a huge increase in home equity lending.

Nearly half (46%) of all U.S. homeowners with a mortgage expect their equity will increase in 2016, with a quarter of these optimists expecting it to rise between 6% and 10%, according to a new survey released by nonbank lender loanDepot.com. The same survey found that many owners don’t realize how much the market has already recovered, loanDepot said. Only 57% think their home’s value rose at all during the past three years, and a quarter of that group thinks it rose less than 5%. The Case Shiller 20-city index shows prices rose twice that much, in fact, 10% from November 2013 to November 2015— though home price increases are intensely local, and not everyone in America is enjoying double-digit increases.

Still, more home equity seems to be translating into sharp rises in home equity lending activity. The number of new HELOCs — home equity lines of credit — originated from January to October 2015 was up 11.8% over the same period one year ago, and at the highest level since 2008, according to Equifax.

Meanwhile, the total balance of home equity loans originated from January to October 2015 was $21.9 billion, a 20.1% increase from same time a year ago; and the total number of new home equity loans for subprime borrowers (i.e. those with bad credit scores) was 652,200, an increase of 24.7% and the highest level since 2008.

The findings are consistent with a Credit.com report earlier this month revealing that the number of underwater homeowners — those who owe more on their mortgage than their home is worth — has dropped sharply.

Not surprisingly, there is a split in optimism between those who suffered the downdraft of the 2008-09 housing recession, and those who bought their homes later, loanDepot said.

  • More buyers who purchased after 2009 (64%) believe their home has gained value since 2013 compared to 58% of pre-2009 owners.
  • More buyers who purchased after 2009 (50%) expect to gain more equity this year compared to 43% of pre-2009 buyers.
  • More pre-2009 owners (65%) believe they have adequate equity now to take out a home equity loan compared to just over half (52%) of post-2009 buyers.

“Homeowners who bought during the housing boom are regaining equity many thought was lost forever, yet too many are not aware of the equity they have gained or they are unclear about how to determine changes in their equity,” said Bryan Sullivan, chief financial officer of loanDepot, LLC.

Plenty of online tools offer home value estimates, and owners who have been timid to look in recent years might take a glance at such sites — but keep in mind they offer only rough estimates. The true value of a home is only determined when a real buyer shows up ready to write a check.

But banks and other nonbank lenders believe the equity gain story enough to free up funds for home equity loans.

How to Use a Home Equity Loan

Homeowners often opt for a HELOC to finance overdue home improvements. The Harvard Joint Center for Housing Studies believes a boom in home improvement projects is coming. It projects spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. (You can learn more about home equity loans and HELOCS here.)

Another common use for a home equity loan is to pay off credit card debt. But you should be careful of this tactic. Transitioning high-interest credit card debt into low-interest home equity debt can be tempting, and it can help some consumers get out of a big financial hole. But it often fails to solve the underlying problem of too much spending and not enough income. A return to equity shouldn’t mean a return to the kind of home-as-ATM free-spending habits some consumers adopted last decade.

 

If your credit score is good, a financial institution may even allow you to borrow up to 80% — or even 90% (but at a higher interest rate) of your home’s value. You can check two of your credit scores for free each month on Credit.com.

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