Life events can have a significant impact on what you require from your home, and retirement is one of the most significant changes that many of us face. This time in your life can mean doing more of what you enjoy, such as traveling, visiting loved ones, or taking up new hobbies. What does this mean for your house?
Retirement is one of the most significant changes that many of us face, and it can have a significant impact on what you require from your home. This time in your life may call for you to do more of what you enjoy, such as travel, visit loved ones, or take up new hobbies. What does this mean for you and your home?
“There are many reasons to buy a smaller home—or to downsize from your present home—but sometimes, the idea that “less is more” is what propels homeowners to buy a smaller home.”
You Can Find the Right Home for Your Needs
The National Association of Realtors (NAR) 2022 Home Buyers and Sellers Generational Trends report provides more information on why people of retirement age choose to move. It cites the desire to be closer to loved ones, as well as the need for a smaller home, as three of the top reasons homebuyers over the age of 55 make a move.
If you fall into this category, changing priorities may be on your mind right now, and this may be driving your decision to downsize. After all, as your lifestyle changes, so will your home's requirements.
Furthermore, as The Balance points out, downsizing can free up even more time in your schedule. Downsizing allows you to spend less time maintaining your home and more time with the people you care about or exploring new hobbies. That's a recipe for reduced stress and increased happiness.
Your Equity Can Make a Big Impact When You Downsize
When you sell your current home and move, your home equity plays a significant role. It could be an excellent tool for assisting you in downsizing. According to CoreLogic's latest Homeowner Equity Insights report, the average homeowner gained about $55,300 in equity over the last year. Dr. Frank Nothaft, CoreLogic's Chief Economist, explains the significance of price appreciation and equity gains for existing homeowners:
“Home 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, . . . For low- and moderate-income homeowners, home equity has historically been a major source of wealth.”
As home prices rise, so does your equity. As a result of the record levels of home price appreciation over the last year, you may have more equity than you realize. These equity gains may enable you to put down a larger deposit on your next home. Putting down more money can also result in a lower monthly mortgage payment, giving you more financial freedom. It can also be a big help in today's competitive housing market, because offering more money up front may help your offer stand out.
Your equity grows in lockstep with rising home prices. You may have more equity than you realize as a result of the record levels of home price appreciation over the last year. These equity gains may enable you to make a larger down payment on your next home. More money put down can also result in a lower monthly mortgage payment, giving you more financial freedom. It can also help you stand out in today's competitive housing market, as offering more money up front may help your offer stand out.
If you've recently retired or plan to do so soon, your requirements are likely to change. That means now could be an excellent time to downsize. Speak with a local real estate professional to get a better idea of how to find a home that fits your needs.
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