Is 2024 The Time To Downsize Our Homes?

On the surface, it can feel as though the people looking to buy homes are the ones struggling right now. After all, interest rates continue to fly off the scale and the lack of affordable houses on the market can make it feel impossible to some people that they will ever get on the housing ladder.

Still, it turns out that homeowners are also in the same boat, with the costs of keeping a house rapidly getting out of control for many. Is 2024 the time to downsize our homes? While it might not be the answer for everyone, there’s a chance that moving to somewhere smaller could be just the thing so many of us need to get those payments back under control.

Weigh up if downsizing will actually save you money

On the surface, opting for a smaller house that comes with a lower price tag than yours might instantly sound like you’re going to save money. However, if you’re still going to need a mortgage on your new place, that might not be the case. Mortgage lenders have recently lowered their rates, but getting a loan to buy a house is still incredibly expensive. If you have already locked in a low-interest mortgage on your current property, you could risk losing that deal in favor of something far more costly if you’re not careful.

Earning a profit on your home might not add up

It’s almost impossible to predict what will happen when it comes to finance. While it seems that mortgage rates will drop again in 2024, it’s not a guarantee. Still, even if they fall, there’s a chance the interest could be a lot more. If you’ve locked in a 3% interest now and rates drop to 7% in 2024, you’re over doubling the interest percentage you will be paying. There’s also the money you will have from selling your home to take into consideration. Say you find a home and sell yours for a leftover amount of $100,000, will all of that money go toward paying for your smaller house, or will there be other fees or an emergency that takes some of that money? After all, anything you don’t have to pay as a deposit on your house will add up in the long run.

There are plenty of other benefits to downsizing

While it’s important to know there are downsides to downsizing in 2024, there can also be plenty of benefits. For one, you could be paying less in property taxes and maintenance, meaning your monthly costs instantly go down in those departments. A smaller house also means you have less space that needs to be heated in the winter and cooled down in the summer, which could go a long way toward your electricity bills. If you seriously downsize, you could also find that you don’t have room for all of your things. Selling the extra furniture might be a temporary boost, but this can help add toward your savings when it comes to the final goal.

Is 2024 the time to downsize our homes? Simply put, it depends. While there can be plenty of benefits that come from moving to a smaller house, there are some serious sums that need to be done to ensure the costs will work out cheaper in the long run and not end up costing the same amount for a much smaller property.