Life events can significantly impact what you need from your home, and retirement is one of the most significant changes many of us face. This period of your life can mean doing more things you enjoy, like traveling, visiting with loved ones, or taking on new hobbies. But what does that mean for your home?
If youāre looking for ways to focus more on the essential things in your life, the answer could be downsizing. A recent article fromĀ The BalanceĀ talks about why it could be a great option, saying:
āThere are many reasons to buy a smaller homeāor to downsize from your present homeābut sometimes,Ā the idea that āless is moreā is what propels homeowners to buy a smaller home.ā
You Can Find the Right Home for Your Needs
TheĀ 2022 Home Buyers and Sellers Generational TrendsĀ from theĀ National Association of RealtorsĀ (NAR) provide more information on why people of retirement age choose to move. It shows the need for a smaller home, the desire to be closer to loved ones, and retirement as three of the top reasons homebuyers over the age of 55 make a move.
If youāre in this group, changing priorities may be top of mind for you today, which could drive your decision to downsize. After all, as your lifestyle changes, what you need in your home likely changes, too.
As The BalanceĀ notes, moving into a smaller home can open your schedule up even more. When you downsize, you can spend less timeĀ maintainingĀ your home and more time with the people you love or exploring newfound hobbies. Thatās a recipe that can lead to less stress andĀ increased happiness.
Your Equity Can Make a Big Impact When You Downsize
Home equity plays a significant role in selling your existing house and moving. In addition, it could be a great tool to use to help you downsize. According to CoreLogic’s latest Homeowner Equity Insights report, the average homeowner gained aboutĀ $55,300 in equity over the past 12 months. Dr. Frank Nothaft, Chief Economist atĀ CoreLogic, explains how strong price appreciation and equity gains are for existing homeowners:
āHome prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth, . . .Ā For low- and moderate-income homeowners, home equity has historically been a major source of wealth.ā
As home prices rise, your equity does, too. So, you may have more equity than you realize because of the record levels of home price appreciation over the past year. Those equity gains could allow you to make a larger down payment on your next home. And putting more money down can lead to a smaller monthly mortgage payment, giving you greater financial freedom. It can also help navigate todayās competitive housing market since offering more money upfront could help your offer stand out.
Whatever your homeownership goals are, a trusted real estate advisor can help you find the best option for your situation. Theyāll help you sell your current home and guide you as you buy your next one and enter this new phase of life.
Bottom Line
If youāve recently retired or plan to soon, your needs are likely changing. That means now may be the perfect time to downsize. Letās connect so we can work together to find a home that matches your situation.