Congratulations, so happy for you as I recall it’s something you’ve been working towards.
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We sold our paid-off home, bought a lot in the place we want to move, and are currently renting an apartment in our old neighborhood (near the grandbabies). We put house proceeds into high interest account and a short term CD, and I was surprised to find that the interest on that money more than covers our rent! That money will all go away-wheeeee- when our modular homes are built in the spring. We will have a multigenerational property with ADU for us and larger home for daughter and her family.
Apartment living is okay, but it just doesn’t feel like home. Maintenance, yard work, taxes etc are a pain, but I want to live in a home I own.
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Anxious mom - okay, you have my dream situation 
My son wants to buy land in beautiful western state that I also love - I’ve been looking at cute (log cabin type) modular homes for years, and would love it as an ADU on son’s property if he goes in that direction (and son would like, lol).
Only add would be hub likes warm weather - so in a perfect world we’d rent out the ADU for a few winter weeks/months and do Air BnBs in Mexico or other beachy locale when home state is chilly (it’s place lots of people like to go in winter).
Good for you - and please keep us posted on your new, modular home! 
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Unfortunately, with inflation, downsizing is still upsizing.
I don’t really see how that could possibly be the case. Sure if you are going from a 2.5% loan to a 7.5% loan the cost of money is higher, but if you buy a smaller home and sell a bigger home the smaller home should be less.
Yeah, you’d think so.
Unfortunately, after you fix up the house to sell and pay closing costs, there may not be enough left from the proceeds of sale to pay for a smaller house. Particularly if the smaller house is a brand-new build with all the bells and whistles in a development that may be a step up from the old neighborhood.
If there is a mortgage involved, that makes it worse. If you want to pay cash for the new place but still have a small mortgage on the old, you have to pay off the old mortgage and leave yourself with less cash for the smaller place. If you will need to pay off one mortgage at a lower rate and take out a new one at a much higher rate, the numbers really do not pencil out.
At least in our area.
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Agree that you for sure have take into account closing/entry costs in selling a house/buying a house, as well as the need for upgrades prior to sale, mortgage payoff, and any upgrades to the new house. It’s certainly situation-specific.
But if you do walk away from the old house with enough proceeds to pay cash for a smaller place (depending on where you move, type of new house) I think the math makes sense and is do-able.
When hub and I got married we ‘stretched’ for a largish new house. Then I had baby, left my full-time job for a number of years - $ was tight & stressful!
This time round - want to be pretty sure that if retirement income decreases or we have large expenses - we haven’t over-extended with purchase of home and have some flexibility…
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I good article on the economic problems for people who want to downsize today
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You have to make concessions. We sold our (way too big for two people home with a big yard) house in the DC suburbs and moved to a considerably smaller house in a different city. I was adamant about being in a walkable area and we liked a certain part of the new city.
So we have a much smaller house and a much smaller yard. For about the same price.
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The logical answer would be a swing back to multi-generational use of the big grandparent house. But usually folks are too accustomed to their freedoms for that, except for when there are dire financial challenges. The grandparent ADU solution could make sense for some families.
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You hit it dead on “for about the same price”. People want to downsize and pay less for less living space, which is not happening in today’s market. So if downsizing won’t save money they stay where they are.
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The other issue is that adult kids don’t get jobs near where they grew up anymore. So, intergenerational living doesn’t make sense for them.
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The real estate “round trip” cost is close to 10% of the sale price of the old house (commissions, excise and other transfer taxes) is also baked into the purchase price of the new dwelling. So that is quite significant!
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It is a significant amount. Also, in some cases people hope to minimize stress and disruptions by moving into their new house before putting the old one on the market. There may be health reasons why it’s not a good idea to have potential buyers visiting the house while it’s occupied. The cost of supporting two houses, even if there are no mortgages involved, can really add up. BTDT.
It took a long time for me to persuade H to move. I had no luck, until we got the surprise news that our first grandchild was expected, due to the costs of moving vs staying put. While I do miss certain things about our former home, I was exhausted by the required maintenance. H’s response was to tell me just don’t do it, but I didn’t want to live in Grey Gardens. Maybe it’s part of getting old, but it can be difficult to accept that downsizing will be costlier than remaining in one’s large home.
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This is actually not true. Most Americans live within an hour of family.
Well, I am one of 7 kids. One of my sibs had her 4 kids all move back to HI. Several of us have kids 3,000-5,000 miles away. I’m hoping one or both of my kids move back but am not holding my breath. S has lived away nearly 2 decades. D has lived away about 15 years.
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I was curious about the numbers and this is what I found.
It states: “Overall, 55% of U.S. adults say they live within an hour’s drive of at least some of their extended family members.”
There are some interesting stats. I’ll share a few:
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“Those with the highest education levels are the least likely to live close to extended family.”
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“Adults with lower and middle incomes are more likely than upper-income adults to live near at least some extended family.”
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“Asian Americans are less likely than White, Black and Hispanic adults to be living near all or most of their extended family”
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“There are notable regional differences across the U.S. in the shares of adults who live near at least some family, with adults in the Northeast and Midwest being the most likely to do so (62% each)”
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Interesting stats. I have one local-ish kid, another 2000 miles away. Both love us. But they are both quite independent - neither would be interested in living under the same roof with us. And to be honest we’ve gotten used to being empty nesters.
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If I were considering selling my house and buying something smaller, I’d at least wait and see how the realtor issues settle down. I don’t want to pay 5 to 6% to my realtor if it’s going to change in the near future. Well, it probably is; we just don’t know the details yet.
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