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Retirees weigh downsizing costs, but equity and taxes complicate moves
Transaction costs can run 10% to 15% of a home's final selling price, and long-distance moves can cost as much as $10,000, according to Experian and Rocket Mortgage.
HousingWire
Redfin data cited by Yahoo Finance suggests empty nesters now own nearly one-third of the country’s large homes, a share that has held steady for more than a decade, while many younger families are still looking to buy. The outlet notes that downsizing can look like a financial win by unlocking home equity and reducing property taxes and maintenance, but the decision is not always a simple comparison of large home values versus smaller properties. According to data referenced by Yahoo Finance, hidden costs from selling and buying can add up quickly, including agent commissions, closing costs, taxes, home repairs, mortgage repayment, and other expenses that can total 10% to 15% of a home’s final selling price, based on Experian. The outlet also cites Rocket Mortgage data showing long-distance moves can cost up to $10,000, such as relocation from the East Coast to the West Coast. Yahoo Finance further points to tax and financing barriers. The IRS exempts up to $500,000 of capital gains for married couples filing jointly, but some homeowners may exceed that threshold after decades in high cost of living areas, and for those still carrying a mortgage, the prevailing mortgage rate can be a key concern, with Redfin noting 58% of baby boomers have already paid off their mortgages.