Smart Moves by Ellen James Martin

Tips for Young, Single Buyers

As summer rolls ahead, most potential homebuyers are in an expansive mood. That’s because, contrary to economic forecasts of some months ago, mortgage rates have again dipped to near historic lows. Meanwhile, employment levels are strong.

But Tom Early, a veteran real estate broker in Ohio, says one category of would-be buyers -- those who are single -- remain somewhat more cautious than couples about buying a home.

“Relying on just one salary to meet mortgage payments can seem scary because it exposes you to more risk in the event of default. Singles know they’d be a lot more vulnerable if the country hits another recession,” says Early, a former president of the National Association of Exclusive Buyer Agents (

Still, there are solid reasons for singles to move toward a home purchase in the near future. One major factor is that renters in many popular areas are now especially susceptible to rising rents.

Arlen Olberding, a certified financial planner based in Colorado, doesn’t necessarily advise all his single clients to pursue a home purchase. He reminds them that there’s relatively little reason to expect significant home price appreciation in the next several years.

“First and foremost, buying a home now should be the right lifestyle decision for you. Think of it less as an investment choice and more as a living expense,” he says.

Here are a few pointers for singles who are determined to buy this year:

-- Pick a property that keeps you within your financial comfort zone.

Many people who faced foreclosure during the last recession were first-time buyers who used an adjustable rate mortgage (ARM) to finance their purchase. They were able to qualify for the introductory “teaser rate” on the home loan. But once the ARM adjusted upward, they were in over their heads.

They might have avoided foreclosure had they used a fixed-rate loan, says Merrill Ottwein, the broker-owner of an Illinois-based realty firm.

Ottwein cautions all buyers -- especially young singles -- against taking any mortgage (fixed or adjustable) that feels uncomfortably large.

“Decide on your affordability target right from the start -- before you go home shopping. After that, don’t let your real estate agent or lender inch you up above your comfort zone,” Ottwein says.

Even now, in an era of tight credit standards, he says it’s possible for qualified buyers to gain approval for a larger mortgage than they can reasonably handle.

“Being ‘house poor’ causes lots of fear and anxiety. It’s an awful way to live,” Ottwein says.

-- Screen for a home that a roommate could share.

If you shared space with roommates in a college dorm, you may be in no mood to repeat the experience in your own home. Still, as a young single, Ottwein encourages you to seek a property that would be attractive to a potential boarder, should you one day need the rental income to help cover your mortgage payments.

“Having an extra bedroom for a roommate can be a way to make ends meet if you find yourself in a financial pinch. Also, a house with two or, ideally, three bedrooms will be easier to sell when you decide to do so,” Ottwein says.

What type of home works best for accommodating a roommate? Ottwein suggests you look for a place with a bedroom suite that includes a private bath, so a roommate could live there more independently. Also, a separate, outside entrance to the suite is ideal.

-- Choose an energy-efficient place.

Once they’ve moved in, many first-time buyers are surprised by the size of their home upkeep expenses. The size of their energy bills also comes as a shock.

Obviously, some costs associated with homeownership -- such as taxes and insurance -- are unavoidable. But home shoppers can more easily contain their energy expenses by choosing a property that’s well-insulated and has substantial double-pane windows, Ottwein says.

“Be sure to ask the home inspector you hire to evaluate the energy efficiency of any property you plan to buy in advance of a final commitment for its purchase,” he says.

-- Remember to factor your social life into your property selection.

If you’re like most singles, your personal life is of paramount importance to you. And even though you may outpace your friends in achieving homeownership, you won’t want your move to make it tough to see them.

You don’t have to live in the immediate vicinity of your friends to stay in touch. But if possible, you’ll want to avoid buying a property many miles from your closest friends, even if that’s the most affordable option.

“When you’re moving ahead with homeownership, be sure not to break the bonds of friendship. Buying a house is an important priority, but so is keeping those friends who are tried and true,” Ottwein says.

(To contact Ellen James Martin, email her at