Retirees often make the decision to downsize their home, often purchasing a home that’s easier to maintain or in an area that better suits their needs. 

15 Roundup on Retirees Downsizing

1. 79% of older Americans will be homeowners in 2022, according to the National Aging Council (NAC).
2. The Joint Center for Housing Studies reports that in 2021, many older adults are “house rich but cash poor,” meaning they do not have the financial liquidity they need. (NAC)
3. About 11.2 million older adult households spent 30% or more of their income on housing costs in 2021. (NAC)
4. In 2022, just 15% of those who were at the age of 75 or over could afford long-term care services and their housing costs. (NAC) 
5. Renter rates are higher among Black and Latinx households, with 37% and 34% reporting homeownership compared to 79% of older white Americans owning a home. (NAC)

1. About 1.3 million Americans have used a reverse mortgage to fund their need since 1990, allowing them to use their equity for financial needs. (NAC)
2. 88% of US adults between the ages of 50 and 80 want to stay in their homes as they grow older. (National Council on Aging Advisor Report). 
3. About 44% of older Americans downsizing need some type of modification to their home to improve accessibility. (NCO)

1. The median home equity for a senior homeowner in 2021 was $250,000. That is 47% higher than the equity levels seniors had prior to 2020. (NCO)
2. For some, cashing in their home’s equity can provide a way to fund assisted living community purchases, which can range from $55,000 to $100,000 or more per year, according to the Center for Retirement Research at Boston College. 
3. Fannie Mae reports that, in 2024, just 17% of older homeowners have sold their homes during retirement, typically doing so prior to retiring, according to Fannie Mae. 
4. Vanguard reports that about 80% of people over the age of 60 are using their homes to fund their retirement. 
5. About 25% of Americans who retire will sell their homes to move to a location that is less expensive, according to Vanguard.
6. Just 52% of Boomers say they will leave their homes, with 43% stating they never want to leave their homes, according to USA Today’s Chase report.
7. Housing costs represent 25% of all Americans expenses for those who are over the age of 65 (NCO).

What to Consider When Downsizing

Making the decision to downsize into a smaller home can offer a range of benefits, but it is critical to think about your specific needs and objectives. Consider some of the benefits of downsizing as you enter retirement.

• Smaller spaces are easier to maintain, with less hands-on work needed.
• Downsizing to another location could help you save money if you move to an area with a lower overall cost of living or other benefits.
• For those who want to downsize for convenience, it may be possible to live closer to the family for added support or to provide help for their needs. 
• When downsizing, homeowners need to consider any updates or modernizations they may need to make to their home if they plan to sell it on the open market. 
• Take into consideration the cost of selling a home, such as obtaining a new mortgage, if you do not plan to use savings to fund the purchase or the equity in an existing loan.

What Will It Cost to Sell Your Home and Buy Another?

When considering the process of downsizing at any age or for any reason, there is an expected cost involved. For example, if the home has appreciated significantly in value over time, there may be capital gains factors to consider. 

Depending on how you plan to sell your home, such as on the open market, you may have to pay for repairs, upgrades, or any safety updates to ensure it can be sold to buyers. More so, there are marketing costs that can be expensive. The cost of downsizing your home’s valuables can also be a factor to consider. 

Grants or Programs for Retirees

One of the best resources available to seniors who are considering downsizing their homeownership is the National Council for Aging. The organization itself does not provide grants or programs, but they do offer a wide range of resources to guide you,

Also, note that the Administration for Community Living offers support and guidance to those who are older on getting services they may need to help them move. 

Downsizing Tips

• Plan to downsize over time. Work to reduce what you own now by giving your items to those who you wish to own them later.
• Consider where you plan to move carefully. In many situations, it can be more affordable to downsize to another location with a lower cost of living.
• Seniors may benefit from assisted living communities or nursing homes as they get older. However, owning a home may make it more challenging to qualify for Medicare or Medicaid benefits to pay for those long-term costs. 

Downsizing FAQs

How can I sell my home fast if I want to downsize? 

Consider all avenues for selling your home. A private sale may be faster and less expensive with fewer requirements for upgrades or modernizations. 

Should retirees downsize? 

Moving into a home that fits your specific needs and offers more comfort to you overall can be beneficial. A home with fewer obstacles, like steps, could make for a better quality of life.