Some Highlights

• Equity is the difference between what your house is worth and what you still owe on your mortgage.
• The typical homeowner gained $28,000 over the past year and has a grand total of $305,000 in equity. And there are a lot of great ways you can use that equity.
• To find out how much equity you have, connect with a real estate agent who can give you a Professional Equity Assessment Report (PEAR).

Retirement is a time for relaxation, adventure, and enjoying the things you love. As you imagine this exciting new chapter in your life, it’s important to think about whether your current home still fits your needs.

If it’s too big, too costly, or just not convenient anymore, downsizing might help you make the most of your retirement years. To find out if a smaller, more manageable home might be the perfect fit for your new lifestyle, ask yourself these questions:

• Do the original reasons I bought my current house still stand, or have my needs changed since then?
• Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
• What are my housing expenses right now, and how much do I want to try to save by downsizing?

If you answered yes to any of these, consider the benefits that come with downsizing.

The Benefits of Moving into a Smaller Home

There are many reasons why you should downsize. Here are just a few from Bankrate:

Your Equity Can Help Make Downsizing Possible

If those perks sound like something you’d want, you may already have what you need to make it happen. A recent article from Seniors Guide shares:

“And at a time when homeowners age 62 and older have more than $12 trillion in home equity, downsizing makes sense . . .”

If you’ve been in your house for a while, odds are you’re one of those homeowners who’s built up a considerable amount of equity. And that equity is something you can use to help you buy a home that better fits your needs today. Greg McBride, Chief Financial Analyst at Bankrate, explains:

“Downsizing can mean taking that equity when the home is sold and using it to pay cash or make a large down payment on a lower-priced home, reducing your monthly living expenses.”

When you’re ready to use all that equity to fuel your next move, your real estate agent will be your guide through every step of the process. That includes setting the right price for your current house when you sell, finding the home that best fits your evolving needs, and understanding what you can afford at today’s mortgage rate.

Bottom Line

Starting your retirement journey? Think about downsizing – it could really help. When you’re ready, talk to a local real estate agent about your housing goals this year.

Everyone’s vision for the future is personal and unique. But for many, common goals include success, freedom, and prosperity — values closely tied to having your own home and the iconic feeling of achieving the American Dream.

A recent survey by Bankrate reveals exactly that: homeownership is still a part of the American Dream. The results show, at 78%, that owning a home tops the list, surpassing other significant milestones such as retirement, having a successful career, and more (see below):

So, why is buying a home important to so many today? One reason is the financial and physical security it provides. Many people see homeownership as a way to reduce stress because owning a home with a fixed-rate mortgage stabilizes what is likely their largest monthly expense.

Another factor is the potential for building wealth. That’s because, over time, homeowners gain equity as they pay down their mortgage and as home prices appreciate, leading to longer-term financial stability.

But what about the responsibilities that come with owning and maintaining a home? According to a survey by Entrata, only 23% of renters feel homeownership is too much work, indicating the majority are open to the commitments and obligations that come with being a homeowner.

What Does This Mean for You?

While buying a home today might seem daunting due to higher mortgage rates and rising home prices, the long-term benefits can make it worthwhile. If you’re considering homeownership, remember that it’s more than just a financial investment — it’s a step toward securing your future.

Bottom Line

Owning a home is a significant and powerful decision that represents a big part of the American Dream. If you’re ready to take this step, start by reaching out to a local real estate agent who can guide you through the process and help you make your homeownership goals a reality.