Why Single People Are Struggling to Find Homes to Buy
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Here's your Money Briefing for Tuesday, October 26th. I'm J.R. Whalen for The Wall Street Journal. Fierce competition among prospective homebuyers continues to add up to a housing market that's on fire. But single people hoping to buy a home often find themselves stuck on the sidelines, with many homes that fit their budget unavailable.
We know that the supply of entry-level housing, that's something that Freddie Mac defines as homes up to 1,400 square feet. That's near a five-decade low.
Coming up, our personal finance reporter, Julia Carpenter, will talk about the struggles of prospective solo homebuyers and what some of them are doing to make a purchase. That's after the break.
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Low mortgage rates have lured millions of house hunters into the market looking for a larger home and more space.
Why are single homebuyers struggling in today’s low mortgage rate market?
But single people searching for a new home are finding the supply of homes frustratingly low. So what are they doing about it? Let's find out from WSJ personal finance reporter Julia Carpenter. She's written about this and joins me now. Julia, thanks so much for being with us.
Thank you for having me.
So Julia, traditionally, homeownership has involved couples and families. But how has the number of one-person households in the U.S. changed over the years?
We've seen the number of one-person households pretty much double in the last 40 years. So in 1980, it was 18.2 million. And in 2020, that number shot up to 36.1 million. And of those current single prospective homebuyers, 19% identify as members of the millennial generation and another 19% identify as members of Gen X. So what factors in the housing market are throwing roadblocks in the way of younger prospective homebuyers as they look to buy? We've talked a lot in the last few months about how this housing market is pricing people out. House owners right now are really excited by the low mortgage rates, but they're often forced to compete with other people who are also excited about the low mortgage rates.
So there's a lot of people, a lot of attention over an increasingly shrinking pool of available homes. We know that the supply of entry-level housing, that's something that Freddie Mac defines as homes up to 1400 square feet, that's near a five decade low. That, coupled with all of the excitement around these low mortgage rates, coupled with the new construction prioritizing bigger builds, means that people are bidding and bidding wars against each other. People are finding that they're not as competitive in certain markets, looking to move further out. So there's definitely a lot of heat building, a lot of prioritizing. pressure building in this scenario. And we're seeing that people who are feeling the pressure to sell are still concerned about the pandemic.
They're concerned that they'll be joining this group of buyers that they won't be able to find something else to move into. So a lot of single buyers are finding themselves at a disadvantage when it comes to purchasing.
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