Inequality gap persists in lending toward female borrowers

What percentage of single women are homeowners?

Indeed,  according to the National Association of Realtors, single women have comprised the second-largest group of homebuyers since 1981. As of 2023, single women made up 17% of all homebuyers as compared to their male counterparts who represent 9% of total homebuyers, according to the association. If you’re wondering, couples – both married and unmarried – remain the dominant group, buyers in about 70% of real estate purchases.

Ukpai ticked more sobering statistics showcasing disadvantages for female borrowers:

• The gender wage gap continues to persist. According to Pew Research, women on average still earn roughly 84% of their male counterparts.
• As a  2021 study found, women pay higher interest rates for their mortgages in 49 out of 50 states despite defaulting less than me.
• A recent Yale study found that single women pay around 2% more when purchasing a house, and earn 2% less when selling.

Ukpai zeroed in on the wage gap: “Women are still earning about 80  cents on the dollar to men so women have less assets, less income,” Ukpai said. “ And then as single women are buying homes, we’re also seeing women are paying more for their interest rates in 49 out of 50 states than men, despite defaulting less.”

Discrimination in lending?

Speaking to MPA on the heels of Women’s History Month, Ukpai said technology can be used to eliminate bias in lending that would help level the playing field: “There is a fundamental recognition that women are certainly capable and poised to be in positions where they can take advantage of the opportunities to build wealth, but we have to make sure we’re leveraging technology in a way that enables it to be more equitable.”

She detailed the use of technology at Better to eliminate lending bias: “We’ve probably invested hundreds of millions of dollars into our automated decision-making engine,” she said. “It takes out biases that occur along the journey of making a homeownership decision. There are thousands of decision points from application to homeowner and we’ve invested in a platform that’s color blind, gender blind, that’s powered by data-driven decisions.”