Is it time to buy a smaller house?

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Real Estate

Life events can have a huge impact on what you need from home, and retirement is one of the biggest changes many of us face. This period of your life may mean doing more of the things you enjoy, such as traveling, visiting loved ones, or taking up new hobbies. But what does that mean for your home?

If you're looking for ways to focus more on the important things in your life, downsizing your home might be the answer. A recent article from ' The Balance' talks about why this could be a great option, saying:

"There are many reasons to downsize, or to downsize your current home, but sometimes the idea that 'less is more' is what drives homeowners to downsize."

You can find the right house for your needs

The 2022 Generational Trends in Home Buyers and Sellers report from the National Association of Realtors (NAR ) provides more insight into why people of retirement age are choosing to move. It shows the need for a smaller home, the desire to be closer to loved ones, and retirement itself as three of the top reasons 55+ homebuyers move.

If you're in this group, changing priorities may be the most important thing for you today, and that could be driving your decision to downsize. After all, as your lifestyle changes, what you need in your home will probably change too.

Plus, as ' The Balance' points out , moving to a smaller house can open up your schedule even more. When you downsize, you can spend less time maintaining your home and more time with the people you love or exploring new hobbies. That is a recipe that can lead to less stress and greater happiness .

Your home equity can have a big impact when you downsize your home

Home equity plays an important role in selling your existing home and moving. It could be a great tool to use to help you downsize your house. According to CoreLogic 's latest ' Homeowner Equity Insights ' report , the average homeowner earned about $55,300 in equity in the last 12 months. Dr. Frank Nothaft, Principal Economist at CoreLogic , explains how important price appreciation and equity gains are to existing owners:

“ Home prices rose 18% during 2021 on CoreLogic's Home Price Index, the largest annual gain on record in its 45-year history, driving a huge increase in home equity wealth.  For low- and moderate-income homeowners, home equity has historically been a significant source of wealth.”

As home prices rise, so does your equity . So you may have more home equity than you think due to record levels of home price appreciation over the past year. Those capital gains could allow you to put down a larger down payment on your next home. And putting more money down can lead to a lower monthly mortgage payment, which can give you more financial freedom. It can also help navigate today's competitive housing market , as offering more money upfront could help your offer stand out.

Whatever your homeownership goals, a trusted real estate consultant can help you find the best option for your situation. They will help you sell your current home and guide you as you purchase your next home and enter this new phase of life.

In conclusion,

If you've recently retired or plan to retire soon, chances are your needs are changing. That means now may be the perfect time to downsize your home. Let's get in touch so we can work together to find a home that matches your situation.