More and more empty-nesters are looking toward downsizing to smaller, cheaper houses. However, many are finding that downsizing can often costs so much that it's just not worth doing.
While homeowners may no longer need as much square footage as their children move away from home, in today’s real estate market, a smaller house might be just as expensive as their current homes.
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Homebuyer Carolyn Marsha, who was downsizing from a large family home, is sold on the idea of small.
"In the smaller house, I feel freedom," she said. "Freedom from taking care of such a large place and yard."
But a recent New York Times article, "The Hidden Costs of Downsizing," explains why that may not always work anymore. Home prices are at a record high, as well as building supplies. The article says many empty nesters want newer construction, with ready-to move in kitchens and bathrooms.
Additionally, many new homes and townhouses nowadays cost well over $500,000, which is much more than what their parent’s 50 year old home sells for.
When empty-nesters don't downsize, it adds to freezes in the housing market, which impacts younger couples who want to purchase, leading to fewer houses being sold.
Realtors hope that as interest rates lower this year, it will give older couples the incentive to downsize. This will jumpstart the housing market.
If you're looking to downsize, go ahead. There are plenty of young families who would love to purchase. Just keep in mind, your new house might be smaller than you'd want.