Report: Women Home Buyers Receive Disproportionately High Mortgage Rates

The influence of women in how and where homes are built is growing - but they may not be getting the respect this newfound financial power affords them from mortgage lenders.

According to today’s Biloxi Sun-Herald, a recent survey from the National Association of Realtors estimates 22 percent of home buyers in 2006 were single women, compared with 14 percent a decade ago, while 61 percent are couples. Women make the final decision on home purchases more than 80 percent of the time and developers are paying attention.

A recent article in the Denver Post described the ways in which American home builders are designing new homes to be more suitable for busy moms or women working from home. Homes in demand include those with dedicated work spaces for women and in close proximity to parks.

Women are also a big voice in the comeback of urban living that has some builders focusing on in-fill developments. In-fills use land in already built-up areas for further construction, a common technique in community redevelopment or smart-growth programs.

Despite the sway women hold over the residential construction industry, they appear to get shorted when it comes to home mortgage loans.

A recent report found that women are disproportionately likely to receive subprime mortgage rates, even if they have high annual incomes. Females at the highest income levels, especially women of color, have the largest disparities relative to men with similar incomes, the report said.

The Consumer Federation of America is an advocacy, research, education and service organization with a membership of around 300 nonprofits. It looked at loan-pricing data for the subprime market, which was released by federal banking regulators for the first time in 2006 for 2005 loans.

Lenders generally attribute the subprime, or bad credit mortgage loan rates issued to the borrower’s credit risk. But the CFA found women have an average credit score higher than men, which raised more than a few eyebrows. About a third of women borrowers receive subprime loans compared with a quarter of men.

The lesson here for women seeking to buy a home is simply to do your homework. Research mortgage rates and loan types and ask questions of your mortgage broker or banker.