How The COVID-19 Pandemic Has Affected Female Homebuyers

How The COVID-19 Pandemic Has Affected Female Homebuyers

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The COVID-19 pandemic has disproportionately impacted female workers. From March 2020 through February 2021, women lost 23 percent more jobs than men did, 5.4 million versus 4.4 million jobs. 

Despite employment struggles during the pandemic, female homebuyers have shown profound resilience. In 2020, Roostify data shows female loan applications increased a staggering 59.04% over 2019’s numbers, even with the surging unemployment rates. 

Still, for every 100 male mortgage applicants in America, there are only 72 female mortgage applicants. Yes, there’s work to do to close that gap but we have reasons to be optimistic. As the country reopens, the employment situation should improve, and there will be women looking to buy homes. 

Here, we’ll discuss the main hurdles female mortgage applicants face (especially during the pandemic), female home-buying trends, and what can be done to improve the home lending process for women.

The main obstacles female mortgage applicants face

An Urban Institute analysis of female-only and male-only borrowers shows that women are more reliable applicants than men, with larger down payments, higher credit scores, and lower default rates. 

Given that women are more responsible with loans, one would think they would be considered choice applicants. In reality, however, they face multiple hurdles, from discrimination during the application process to employment issues during the COVID-19 pandemic. 

Discrimination during the mortgage application process

Women pay higher mortgage rates than men in 49 of the 50 states, according to industry data published by Housing Wire. This is a major issue.

In Mississippi, for example, single women pay a mortgage rate of 3.47%, versus just 3.37% for single men. Other states, such as New Jersey, Ohio, and Florida, have mortgage rates about as unfair. Over the lifespan of a 30-year, fixed-rate mortgage, that averages to roughly $7,000 more in payments on the average-priced home.

Why has this happened? 

Despite the fact that fair lending regulations prevent discrimination during the mortgage application process, it still occurs (either consciously or subconsciously). As an article published by the National Association of Women in Real Estate states: 

Women are largely discriminated against for what they are, their marital or physical status and their ethnicity — that is for being single, pregnant and/or being non-white. Lenders tend to look at women who are divorced or single with dependents as too risky.”

In short, women, notably single females, single moms, women of color, and/or pregnant women, face challenges when looking for a mortgage. Such discrimination has its roots in societal and workplace discrimination.

The ‘she-cession’ created by the COVID-19 pandemic

There are numerous reasons the COVID-19 pandemic created a she-cession

First, sectors most affected by lockdowns and viral spread are female-dominated sectors, such as hospitality, retail, and foodservice. When companies laid off workers, the majority were female. Moreover, Black and Latina women have been disproportionately affected by these layoffs. 

Second, women have continued to take a greater share of domestic duties during the pandemic. Married mothers and single mothers have both seen employment setbacks. As an article in the BBC wisely stated, flexibility has been a double-edged sword for female employees. 

Third, the stress of juggling remote work and home responsibilities during the pandemic has caused many to rethink their careers. According to McKinsey’s 2020 Women in the Workplace report, 1 in 4 women is considering downshifting or leaving the workforce due to COVID-19 (especially mothers, Black women, and senior-level employees). 

Unless a turnaround happens soon, the she-cession could have more than a short-term impact on female mortgage applicants, with millions of women left out of the dream of homeownership. 

Thankfully, female mortgage applicants have shown incredible resilience throughout this pandemic. That’s why there’s reason for optimism going forward. 

Promising trends for women homebuyers

Despite lingering discrimination in the mortgage application process and employment issues during the pandemic, there are many positive trends for female homeowners:

  • Female home buyers are still the second-largest group of homeowners after married couples, according to data from the National Association of Realtors.  
  • For couples buying homes, 80% of real estate agents have seen a rise in women as the primary income source (survey). 
  • In increasingly more metro areas, women are buying up homes at a rate much faster than men. Cities with the most female mortgage applicants include Sante Fe (NM), Springfield (IL), Carson City (NV), and Iowa City (IA). 

What’s driving these positive trends?

Well, although employment setbacks have stalled or slowed women’s progress during the pandemic, it hasn’t undone generations of progress. Still, to ensure the damage isn’t lasting, steps must be taken to end the she-cession and begin a she-covery

Additionally, the rise of digital mortgage platforms, like Roostify has benefited women and minority mortgage applicants. Not only do such digital platforms streamline the mortgage application process, but bias and discrimination are far less likely with such tools. 

According to data published by Professional Builder, “digital, algorithm-based lenders discriminate about 40 percent less than traditional mortgage companies.” Without a doubt, greater adoption of digital tools can bring increased equality to the mortgage application process. And that will benefit the industry as a whole. But the right tools alone aren’t enough to create a truly fair and inclusive home lending ecosystem. We also must embrace change to close the gap. 

A better future for female mortgage applicants

There’s no one-size-fits-all approach. A myriad of actions can help ensure female mortgage applicants have access to the best possible home loans. 

To begin, the industry as a whole needs a stronger commitment to gender equality and eliminating bias and discrimination. Furthermore, greater support must be given to female homebuyers with education and transparency throughout the lending process. 

To combat mortgage rate discrepancies, female mortgage applicants can empower themselves by rate shopping, negotiating, and refinancing if possible. Home lenders should focus more on offering fair, transparent rates, as well as adopt digital tools that boost efficiency and lower lending costs. 

After all, it’s the 2020s. It’s time to get rid of the old-fashioned back-and-forth between lenders and borrowers. We can eliminate inefficiencies with digital tools that streamline processes and improve affordability.  

Finally, we all need to come together to beat the she-cession. As an opinion piece in The Oklahoman states, we must prioritize getting women back to the workplace. Employers should find creative ways to meet the needs of women workers during the pandemic, whether that be benefits like daycare or conveniences like flexible scheduling. We also should invest in training programs that help women learn new skills and gain upward mobility. 

How we help lenders help female mortgage applicants

At Roostify, we build digital home lending tools with you and your customers in mind. We simplify the entire home loan process so that you can provide your applicants with fast, fair, tailored experiences. 

We also don’t use a standardized approach. We offer an out-of-the-box lending solution that you can adjust to your needs. With our solution, you can customize the components with the consumer’s experience in mind, ensuring you help female applicants get more affordable loans in a shorter amount of time. 

To learn more about the ever-changing home lending landscape, explore our latest white paper featuring our proprietary home lending data. 

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