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9 things single home buyers must know

single-home-buyerUpdated By Richard Barrington

Although most people wait till they are married to get buy a home, single home buyers represent a significant portion of the market. According to data from the National Association of Realtors (NAR), better than one in four of today's home buyers is single, and current conditions suggest that more single people may want to consider buying a home.

Here are nine things you should know about buying a home while single:

1. Americans are staying single longer

The Pew Research Center reports that U.S. Census figures indicate Americans are staying single longer than ever before. In 2017, the median age at first marriage reached a record high of 29.5 years for men and 27.4 years for women.

Those figures are approaching the median age for first-time home buyers, which is 32 years according to the NAR. With people staying single longer, it stands to reason more and more people may find themselves reaching the age where they want to buy a house before they reach the point of get married.

2. Income may be main obstacle for single home buyers

Naturally, the biggest challenge that single home buyers have compared to some of their married counterparts is drawing on only one income. When you apply for a mortgage loan, the mortgage lender uses a debt-to-income ratio to evaluate your qualification. This is the amount your monthly payments, including existing debt plus the mortgage you are applying for, represent as a percentage of your income.

A higher income figure helps to bring down your debt-to-income ratio and make you more attractive to mortgage lenders. Naturally, it helps to have two incomes in the household, as some married couples do, but you can also help your debt-to-income ratio by keeping non-mortgage debt to a minimum.

3. For better or worse, you own your credit

Along with one income, you have just one credit history to rely on when applying for a mortgage loan. If you have had credit problems, then the absence of a spouse means you don't have the potential for someone with better credit to pull up the household's credit profile.

On the other hand, being single means you don't have to worry about someone else's past credit problems. If you've kept a pretty clean credit history, then being single may actually be an advantage.

4. FHA mortgages can lower hurdle for single home buyers

Along with debt-to-income ratio and credit history, saving for a down payment on your own income is a hurdle for single home buyers. FHA mortgages can help make all these hurdles easier to clear for first-time home buyers. They use easier qualifying standards and allow for down payments as low as 3.5 percent of the mortgage loan value. You may also be able to access state homebuyer assistance programs that help you qualify for a loan.

FHA mortgages entail paying mortgage insurance premiums, and may not offer the most competitive mortgage rates. Still, if an FHA mortgage is your best shot at qualifying for a mortgage as a single home buyer, you may consider it worth paying a little extra.

5. Rising rents can make home buying appeal to singles

Yes, there are financial hurdles to buying a home while single. But renters are also finding rising rents to be a growing financial burden. A National Association of Realtors (NAR) survey found that in the 18 to 34 age group, rising rents were the biggest trigger prompting people to buy a home for the first time.

NAR also reported that figures from the Department of Housing and Urban Development (HUD) show that rents were up in 85 of the top 100 metro areas, so rising rents can be difficult to avoid. That makes buying a house a good alternative for people who want to stabilize their housing costs.

6. Home prices can get away from those who wait

The strong housing market is showing would-be home buyers that there can be a cost to delaying the decision to buy a home.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index shows that home prices have risen for each of the past six calendar years, and they are on pace to rise again in 2018. Rising prices create a financial incentive for singles not to wait for marriage, children or other traditional triggers to buy a home, because home prices have only been getting more expensive with each passing year.

7. Job stability opens the door for single home buyers

What a difference a decade makes. The unemployment rate reached 10 percent in the aftermath of the Great Recession, but was below 5 percent by early 2016, and now stands at 3.7 percent.

A stronger job market helps single people earn enough to afford a home, and also can provide the job stability necessary to convince a younger adult to commit to a location.

8. Buying a home while single does not have to mean flying solo

Buying a home can be a daunting decision for anyone, and this is especially true when you are solely responsible for that decision. However, single home buyers do not have to face this decision alone.

Lean on the advice of people who have been through the process before -- parents, older siblings or friends. Have someone come with you to look at a house you are serious about before you make an offer. A second pair of eyes can be very valuable, so they may point out things that you have missed. Or, you may be comforted to find that they reinforce your positive impression.

9. Single women home buyers lead the way

Single women are twice as likely as single men to buy a home. According to the NAR, 18 percent of U.S. home buyers currently are single women, compared with just 9 percent who are single men.

Interestingly, single women buy lower-priced homes on average than do single men. This may be a clue that one way for a single person to get into the housing market is to be pragmatic about your expectations and how much you are willing to pay for a property.

Not all single people fit the stereotype of a person who shies away from commitment and has no desire to put down roots. Many single people have steady jobs and an attachment to the area where they live. If you fit that profile, it is worth at least considering buying a home.

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