For Richer or for…? (Real Estate and the Middle Class)

In hindsight, I may have gotten a little too sucked into the daily drama during the last presidential election. I guess there are worse things to be focused on. The 2016 election will no doubt be full of even more scandals, gaffs, and a lot of cringing. Real Estate trends are a solid indicator of what’s happening across economic classes and though economists use this data regularly, home ownership is not a topic you hear a lot about on the campaign trail.

According to NAR (National Association of Realtors) Research, the share of homes bought by single women has fallen 33 percent since 2006, while unmarried couples’ portion has jumped 36 percent. Married couples’ ownership has increased 10 percent, and single men’s share is unchanged. I often wonder when or if I would have purchased real estate had my husband not already been a homeowner when we first started dating. Would it have been a priority for me?

Since 2013, I have helped 40 sets of clients buy real estate. Of those, 4 were single women. 3 were single men. 2 were unmarried couples or friends and the other 31 were married couples. Condos, townhomes, and single family homes in Northern Virginia and DC are among some of the most expensive in the country and it often takes two incomes to qualify for a purchase.

Even those who are able to purchase property on their own, often have help from family for some of the ancillary costs (movers, new furniture, and minor renovations). Sometimes a purchaser might receive a “gift” from family as part of their down payment. All of this still suggests that the ability to purchase property comes from the opportunity that having money, or access to money, affords. Although my husband and I bought our home on our own, with our savings, in my heart of hearts I know that if we were unable to pay our mortgage for some reason, we have family that would help keep us afloat. You often cannot make the leap into real estate with the currently strict mortgage standards unless you feel you have a safety net.

It’s easy to see how someone with opportunities is a multiplier for more opportunities and how someone without a safety net is often unable to get over the hurdles to building long term financial wealth. According to Bloomberg.com, homeownership has declined to its lowest level since 1993. And, this is not because wealthy people are not buying real estate. It’s largely because the middle class cannot afford to buy real estate. Homes are the leading asset for someone in the middle class and not being able to get into the market greatly affects the financial wealth of these people and households.

Student loans, inequities in salaries between men and women in similar positions, and a dip in employment opportunities for over a decade have all led to a greater economic divide. It takes a lot to buy a house these days. I have worked with a handful of couples with hopeful sights on purchasing who end up renting for the short term as they continue to pay off debt and save. Homeowners and non-homeowners alike are generally glad that the mortgage standards that were unreasonably loose, 10 years ago, have been tightened. No one wants to swim in a sea of debt that they cannot pay back, be it a home mortgage or a student loan.

As a Sociology major, all of this interests me academically. As a Realtor, I care greatly about these trends. As a homeowner and an engaged member of my neighborhood, I value the options, at all price points, Reston has to offer. It’s important to me that my daughters go to school and grow up with kids and amongst families that work hard in different professions that produce diverse incomes and that we live in a community with shared opportunities. I like capitalism and I also like fairness. As a woman, and a mother to two daughters, I hope more women are able to add homeownership to their list of assets in the near future.   Homeownership means a lot to the fabric of communities, to the longevity of school systems, local governments and local businesses.

I wonder which candidate will care about what I care about…which one will change my mind, which one will have no stance?   Stay tuned.

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