If you thought the endless swiping and scrolling on dating apps were the worst parts about being single, then hold on, because there’s an even colder reality awaiting you.
While one is the loneliest number, it’s also, increasingly, the poorest.
Though it’s not surprising married couples have a higher net worth than singles, over the last decade, that gap has more than doubled and married couples are pulling out far ahead of singles.
The skyrocketing value of assets — especially homes — over the past couple of years is largely to blame for the growing gap, but high inflation and rising interest rates aren’t helping either.
And at a time when more people are staying single for longer, building wealth on your own is becoming increasingly difficult.
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The gap that keeps on growing
In 2019, the net worth of married and single households differed by $60,000 — more than double the size of the gap that existed in 2010, when it was about $25,000, according to data from the survey of consumer finances, analyzed by the Federal Reserve Bank of St. Louis.
But the ballooning value of assets like investments, vehicles and real estate especially, has widened the gap even further over the past couple of years, estimates Lowell Ricketts, data scientist at the Institute for Economic Equity at the St. Louis Fed.
“What we've seen since 2019, is really this incredible asset price appreciation,” says Ricketts.
“Houses are getting more valuable as have been financial assets, although until recently with the market volatility, financial assets have had much more of a roller coaster ride, but housing assets still remain very strong.”
The median house price in the U.S. in 2019 was about $300,000, according to Realtor.com, while in December of 2022 the median list price was $400,000. And that increase is showing up in the disparity of wealth.
That extra $100,000 makes applying for a mortgage that much harder if you’re on your own and trying to get in on a competitive market. But if you already own, that value adds to your wealth.
Married couples are “going to have … greater net worth of accumulation through housing equity. And so I think that's going to potentially balloon this gap even further … barring any sort of housing market downturn, and rapid price depreciation.”
In 2021, married couples were twice as likely to buy a house than singles. That year, 60% of homebuyers were married couples, 19% were single women and 9% were single men, according to the National Association of Realtors.
Inflation and rising interest rates hit single income households hard
High inflation, which was 7.1% in November, and the increasing interest rates aren’t helping singles either.
“That can be a factor for the single households as well, that they just have less choices in front of them to deal with inflation across a broad range of goods,” says Ricketts. “So we might see some exacerbating factors there.”
The smaller your income or net worth, the more likely it is that you’re already buying items on the cheaper end of the scale. And when those items rise in price, there aren’t many options for an even cheaper item.
“Dual-earning couples not only are bringing in two incomes in many cases, but also sharing the expenses, food, clothing, shelter, anything. So that there is an innate disadvantage,” says Margaret Price who co-wrote the book Single Women and Money: How To Live Well On Your Income.
And single women have the added hurdle of the gender pay gap.
Over the course of their career, women make about $400,000 less than men, according to the National Women’s Law Center and it’s doubly worse for women of color.
“Inflation only exacerbates the problem,” says Price. “But the point is that even if inflation cools, which certainly everyone is hoping for, the fact remains that single women are at a notable disadvantage.”
Tips to protect what you have
While getting ahead can be a challenge, it’s important to make sure you’ve taken the necessary steps to protect your wealth when things go sideways — especially since you can’t rely on your partner to pick up the slack.
First, make sure you have funds to support yourself if you ever lose your job.
“The burden is all on you. And chances are, you earn less than a man. And chances are you earn less than dual-earning couples,” says Price.
Adding to an emergency fund is important to becoming financially secure. Price suggests setting aside at least three months’ worth of money.
Then, Price recommends you do some estate planning, even if you’re young and healthy. While that means writing a will, there’s plenty of other important discussions this type of planning will bring up — like who will make decisions for you in the case that you’re unable to.
“We don't know if something is going to happen to us,” she says. “We could be in a car accident anytime, we could develop an illness. And the question is not only just about mortality, but also who will help us out.”
Another way to build wealth
While you might not be able to afford a house as a single person, there are other ways you can build your net worth through real estate.
Prime commercial real estate, for example, has outperformed the S&P 500 over a 25-year period. With the help of new platforms, these kinds of opportunities are now available to retail investors. Not just the ultra rich.
With a single investment, investors can own institutional-quality properties leased by brands like CVS, Kroger and Walmart — and collect stable grocery store-anchored income on a quarterly basis.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.