How to Downsize Your Home
On paper, downsizing seems simple. Moving into a smaller home can let you save money and cut down on your cleaning and maintenance, freeing up money and time for travel, hobbies or just binge-watching your favorite show.
But as you learn how to downsize your home, you may find that the reality is harder. You might need to reduce how much stuff you own, let go of sentimental items and leave the home you’re used to. It can be challenging.
Whether you’re a retiree looking to simplify your living space or a busy professional who wants to spend less time on home maintenance, here’s what you should know about downsizing
Downsizing can let you cash in on some of your established home equity to boost your retirement fund. It can help you cut down on your living expenses, as well as your home maintenance and yard work. And moving into a smaller home can also make sense if you want to travel or spend more time away.
10 steps to downsize your home
Packing up decades of belonging and memories can be overwhelming, and navigating the real estate market can be tough if it’s been a while since you bought your home. Here are 10 steps to help you get through the process:
1. Look at the equity in your current home
Depending on when you bought your home and how property values have changed in your area, you may have a lot of equity in your current house — check out our guide on calculating your home equity to figure out how much. The average homeowner in August 2025 had roughly $213,000 in accessible equity, according to ICE Mortgage Technology.
If you have equity, you could sell your home and buy a new property in cash (and even walk away with money, too). If you won’t have enough to buy a smaller home outright,
shop around for mortgage rates and use our mortgage calculator to see what the payments will be like.
2. Think about how much space you really need
Downsizing doesn’t have to mean cutting your living space in half. Be realistic about your lifestyle and priorities. For example, if you like to host large parties for friends and family, look for a home that lets you comfortably entertain. But, if you rarely have overnight guests, you may not need an extra bedroom and can make do with less square footage.
3. Research real estate prices
Once you know how much equity you have, use home sales tools or contact a real estate agent to find out how much smaller properties in your area cost. Research home values in the neighborhoods that appeal to you, and be sure to look for added costs, such as condo or homeowners association (HOA) fees.
4. Take a home inventory
You don’t have to get rid of everything, but you may at least need to reduce how much stuff you have. Before looking at new properties or packing up your belongings, walk through your current home with a notepad and take photos. List out which items you simply can’t get rid of and which ones you’re willing to sacrifice.
5. Develop a budget
Now that you know how much space you’ll need and which features you’ll want in your next home, you can develop a budget for your new lifestyle. Factor in mortgage payments for a smaller house, insurance, property taxes, utilities, HOA fees and any maintenance or renovations.
6. Brainstorm storage options
If you have belongings you don’t want to part with, get creative with storage spaces to make downsizing easier and get by with less space. Under-bed drawers, storage ottomans, chests that double as coffee tables and vertical shelving can all help you maximize your space.
As a temporary measure, you could also rent a storage unit as you adjust to a smaller place. If you store items and realize you haven’t needed them or visited the storage unit in months, that’s a good sign you can look to sell or donate them.
7. Consider how much it will cost to prepare your home for sale
To help your current home sell quickly (and for the best price), you may need to make some changes or updates, such as painting, landscaping to boost curb appeal or replacing old appliances. Budget for these changes ahead of time so you’re not caught by surprise with last-minute expenses.
8. Create a plan for getting rid of your extra stuff
Contact family members and friends and see if there are items they want. For example, you may have a grandchild who would love your cranberry glass collection or art deco bar cabinet. You could also host a yard sale or sell items for cash on sites like Facebook Marketplace or Offerup, or else you could donate them to local charities.
If you think you’ll have a lot of things to get rid of, working with an estate sale company might be a good idea. It will handle most of the work and take a cut of the sales. You can find companies near you on EstateSales.org.
9. Get preapproved for a mortgage
If you’ll need financing for your next home, see if you can get a mortgage preapproval before you start looking at properties. Getting preapproved will give you a clearer picture of what you can afford and put you into a stronger position as a buyer.
10. Be prepared for some home sickness
The hardest part of downsizing might not be the actual packing but rather just letting go. If you spent years in your home and have wonderful memories there, it can be difficult to move out. You may also need to part with beloved family heirlooms or collectibles. Take some time to process the change and grieve, and give yourself some grace as you navigate this major adjustment.
Pros and cons of downsizing your home
Pros
- Downsizing can cut your housing costs and save money.
- Smaller properties usually need less maintenance and upkeep.
- You can use the equity from the sale of your property to boost your retirement.
Cons
- You may have to get rid of some belongings or adjust to a smaller living space.
- Hiring movers, buying new furniture and renovating can add some expenses up front.
- Leaving a home or letting go of sentimental items can be emotionally stressful.
If you’re a new retiree, downsizing is more than a financial choice — it sets your lifestyle up for the remainder of your retirement. It can add to your retirement fund and help you get a home that’s more accessible if your mobility changes.
Frequently asked questions
Although older adults are more likely to downsize than others, moving into a smaller home can have benefits for people at any stage of life. Whether downsizing makes sense depends on your finances, lifestyle and goals.
To get started, think about how much home equity you’ve built and how much space you need. Also develop a plan for handling your belongings.
Many people who have decided to downsize their homes say the emotional strain is often the most difficult part of the process. The key is to focus on what you’re gaining through downsizing rather than what you’re giving up. Think about how downsizing can let you spend with your loved ones or enjoy a larger financial cushion so you can travel.
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