Pay Gap: How It Will Affect New Home Construction

October 31, 2017 , In: Advice, Real Estate , With: No Comments
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After I graduated from college, it was fairly natural to compare wages with my friends and classmates to benchmark ourselves. It was something of a shock to realize the disparity that occurred not only from industry-to-industry, but specifically from my male friends to my female friends. I now realize the pay gap between men and women is a decades-long conversation. It refers to how, on average, women earn less than men. But it’s still going on. In the 50 largest U.S. cities, for example, women earn only $0.74 for each $1.00 a man earns.

Even in sectors like construction, where wage parity between the genders is more equal, women earned 91.3% of men’s wages. In an industry where only 10 percent of construction industry employees are women, this is extremely progressive, but unfortunately not enough.

The pay gap is an economic disadvantage for women like myself. It’s usually discussed in the context of workplace inequality, but it also has serious repercussions in the housing market. Women are just as much home buyers as men. Single women now buy 17 percent of all new homes, and only 7 percent are bought by single men.

But the construction industry should realize that, as a result of the pay gap, the rate at which new homes are built may drop or flatline. Wage equality, on the other hand, might spur growth in the new home market, which in turn would help everyone in the industry gain more business. As a college-educated woman, I look forward to the time when I can either buy or build my own home. But where do we start?

The Pay Gap and How It Affects  Rentals and Starter Homes

In the U.S., the income gap ranks us at #19 out of the 30 countries in terms of gender pay disparity according to Bank of America’s “Transforming World Atlas” report. A man’s average median income in the US is 35 percent more than that of woman’s. Men earn $32,451 a year, compared to women, who earn $24,115. That’s an average $8,336 difference per year.

Men and women are given similar expectations when it comes to getting a rental. Women just have less money to work with on a monthly basis. With the rule-of-thumb of real estate taking no more than 30 percent of a person’s pay in mind, it becomes clear that men can afford real estate, whether a rental or starter home, more comfortably than most women can. Women earning the median income would only be able to purchase one bedroom homes in 26 out of these 50 cities.

money-comparison

The Pay Gap’s Effects

New housing, or even remodeling of older homes, is not going to move at a robust pace if women like myself can’t afford a home.

The picture is even worse for rental properties. In the largest 50 cities, except Wichita, Kansas and Tulsa, Oklahoma, women are priced entirely out of one-bedroom or studio rental property. Men, on the other hand, could rent in 18 cities on their own.

Part of the issue is skyrocketing housing prices, particularly on the East and West Coasts. Singles of either sex are unable to afford either renting or buying in 14 out of the 50 largest cities. Not surprisingly, these include New York City, Los Angeles, San Jose, and San Francisco.

The pay gap isn’t only an issue about economics and housing prices, either. Lower earnings has effects on women beyond finances. It causes extra stress and lower life expectancy. And I mean why wouldn’t it? Housing is an essential need in order to survive.

For me as a young woman, it’s also sad to realize that, despite all the battles fought and won for women’s equality, like increasing representation in construction, de facto housing discrimination caused by the pay gap is still with us.

More Single Women Are Buying Homes Than Men

Growing home ownership among women highlights all of these trends. Women are buying new homes twice as often as men.

Why is this happening? More people are single. Twenty percent of 25 year olds and older are single. In 1960, only 9 percent of this age group was unmarried. While more adult men than women are single––23 percent and 17 respectively––single women are buying more homes.

There are several reasons for this. There are 8.6 million single-mother households, versus 2.6 million single-father households. Single parenthood is likely a huge motivator for wanting the stability and price appreciation of owning a home. I know if I ever have a child, it will spur me to want to purchase the best house I can find. However, as mentioned, I will at this rate, most likely be able to afford less house compared to a man in a similar position.

Closing the Pay Gap Means More Real Estate Marketplace Growth

If businesses raise women’s wages, it isn’t just me who would benefit. Data indicate that real estate marketplace growth could be driven strongly by raising women’s wages. It would positively affect every industry that touches home ownership, such as home decor, home repairs, and more. Ultimately, more salary parity between men and women could mean more projects and stable growth for everyone in the construction industry. So what’s stopping us?

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Pay Gap: How It Will Affect New Home Construction
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Pay Gap: How It Will Affect New Home Construction
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While the cause of the pay gap between men and women is up for debate, there is no denying its effect. Here's how it will affect new home construction.
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Your Wild Home
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Megan

Editor at Your Wild Home
Hey! I'm Megan. I am a dog-lover and enjoy exploring the outdoors. Your Wild Home covers a lot of topics, including (but not limited to) home improvement, home decor, construction, real estate, and sustainability. I enjoy writing in third-person and I am addicted to chocolate, coffee, and terrible puns. Learn more on my About Me page!
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