Downsizing into a smaller home has been a rite of passage almost exclusively for empty-nesters and retirees. But as home prices and mortgage rates rise and the inventory of homes for sale shrinks, younger generations might find upsides to downsizing earlier in life.
If you don’t need a bigger home, downsizing earlier could work in your favor. Here are three reasons why:
1. You’ll free up money for other financial goals. If you have a bigger home, much of your income is tied up in monthly mortgage payments. By getting a smaller, more affordable place, you could free up cash to put to work toward other goals such as college savings or retirement, says Tyler Whitman, a real estate agent with TripleMint in New York City.