Homeowners

How to Decide If It’s Time to Downsize Your Home

Over time, four-bedroom houses that once bustled with large families may sit half-empty, filled with unused rooms and yards that feel more like chores than outdoor sanctuaries. 

For homeowners eyeing smaller, more manageable properties, the appeal isn’t just about less maintenance. It’s also about saving money on mortgages, utilities, taxes, and upkeep. So, it’s not too surprising that many homeowners are wrestling with whether downsizing makes sense for their situations.

“Most of my clients who are considering downsizing are retired, nearing retirement, or empty nesters,” said Melody Parker, a Realtor with Keller Williams Realty Atlanta Partners. “Some clients have decided that they just don’t need all the extra space, so they can save some money by buying a smaller home.”

Here’s what homeowners should think carefully about if they’re considering downsizing.

Should you downsize your home?

There are lots of factors to consider when it comes to downsizing your home. Some of these are practical, like how much money you could save, how much square footage you need to be comfortable, and if you would prefer to live in a one-story home.

Some considerations are more emotional.

“Doubt, hope, stress, fear, excitement, confusion and relief are a few of the emotions that homeowners feel when faced with downsizing,” said Parker.

For example, there’s bound to be some uncertainty about downsizing if you’ve been living in your home for many years. At the same time, you could feel relief from not having to deal with so much upkeep.

Parker urges homeowners to carefully weigh the pros and cons of downsizing before jumping in.

“Do the potential benefits of saving money and spending less time on home maintenance and upkeep outweigh the possible drawbacks, like not having as much room for children and grandchildren to come visit?” she said.

Signs it’s time to downsize your home

So, what are a few common signs that it’s time to downsize your home? The most obvious is that you’re not using all the square footage under your roof.

Maybe there are bedrooms that go unused or perhaps you’ve got a finished basement you hardly spend time in.

Another sign it’s time to downsize your home might be that you’re spending more money than you want to on home maintenance, upkeep, and repairs.

Generally speaking, the bigger the home, the more opportunities there are for things to break down or wear out and need fixing or replacing. Plus, you may be spending more to heat and cool the home.

Meanwhile, many seniors find that the home they’ve enjoyed living in for many years simply isn’t practical anymore. Stairs might make it difficult and potentially dangerous to access the upstairs area, a steep driveway could present a fall risk, or lawncare and snow shoveling may have become physically challenging.

About 94% of adults aged 60 and up say that aging in place is an important goal for them, according to a survey conducted by U.S. News & World Report.

“Downsizing into a smaller home without some of these obstacles could make it easier for seniors to age in place,” said Parker.

The financial implications of downsizing

Saving money is one of the main reasons many people choose to downsize their home.

But there are a lot of factors that can impact the financial equation, starting with the closing costs paid on the new home and expenses associated with moving.

Plus, home prices have risen over the years. And if you locked in a low interest rate on your mortgage, the rate on your new home could be higher. These factors could increase your mortgage payment.

“For some homeowners, downsizing ends up costing about the same as if they had stayed in their original home,” said Parker.

Tips for downsizing your home

Here are a few tips for how to downsize your home:

• Figure out how much space you really need. Be realistic about your lifestyle and plans. If your children and grandchildren visit often, you may still need an extra bedroom or two and a large kitchen for preparing meals.
• Take inventory of your belongings. You may need to do some serious purging before downsizing. Decide which belongings you need and which you don’t. Then devise a plan for selling or donating before your move.
• Update your budget. Once you have a good idea of your new mortgage payment, insurance, property taxes, and utilities, adjust your budget to reflect the new numbers. If there’s a savings, decide how to best allocate the funds.
• Start getting emotionally prepared. The physical and financial preparations are one thing, but dealing with the emotional aspects of downsizing your home might be even harder. Give yourself some time to process the change and prepare for the lifestyle adjustment.