When to Upsize or Downsize Your Home
Published on March 13, 2025 | 4 Minute read
Melanie
Ortiz Reyes
Content Specialist
The size of your living space can impact your daily routine, financial health, and quality of life. For many homeowners, the question of whether to upsize or downsize becomes inevitable as life circumstances change. Perhaps your growing family is bumping elbows in your starter home, or maybe you're rattling around in too much space after children have moved out. Financial shifts, career changes, health considerations, and lifestyle preferences all play important roles in this decision. Even your relationship with material possessions and your vision for retirement can influence whether you need more space or less.
When to Consider Upsizing
Family Growth and Space Needs
The arrival of children or the need for additional living space often drives the decision to upsize. When closets are overflowing, storage is minimal or non-existent, and you're using every available corner for belongings, it might be time for more square footage. Many families also find themselves needing dedicated spaces like a home office as more people work remotely, a workout room, playrooms for children, or guest rooms for when family comes to visit.
Lifestyle and Entertainment
If you enjoy hosting friends and family but struggle with limited seating or cooking space, a bigger home with an open floor plan or dedicated entertaining areas might better align with your social lifestyle.
When Downsizing Makes Sense
Life Transitions and Maintenance Concerns
When children move out or you get close to retirement, you might find yourself with empty bedrooms and excessive space to maintain. Downsizing can free up time and resources previously devoted to maintaining unused spaces. If you're spending too much time,energy or money on upkeep, a smaller property might be ideal. Many retirees prefer single-level homes with less maintenance to accommodate changing physical abilities.
Financial Pressure and Simplification
If property taxes, utilities, and maintenance costs are straining your budget, a smaller home could provide financial relief. Downsizing can lead to reduced expenses across the board and can free up equity to support retirement savings or fund other life goals. Many people also find that downsizing brings a sense of liberation from possessions and allows for a more intentional lifestyle.
Financial Considerations
Understanding the Complete Cost
Beyond the purchase price, housing decisions can impact your finances in multiple ways:
Upsizing typically means:
- Increased property taxes and higher utility bills
- More expensive homeowners insurance
- Additional furniture and decor costs
- Greater maintenance expenses and potentially higher HOA fees
Downsizing often leads to:
- Lower mortgage payments or possibly no mortgage
- Reduced property taxes and decreased utility costs
- Less spent on maintenance and repairs
- Potential cash from home equity if you sell high and buy low
Lifestyle and Practical Factors
Location vs. Space
Would you rather have a smaller home in your ideal location or a larger home in a less desirable area? This tradeoff often determines happiness more than just square footage. Think about how your location affects commute times, access to amenities, and overall quality of life.
Future Planning and Time Management
Consider how long you plan to stay in your next home and whether it will accommodate aging in place. Evaluate neighborhood trends and the property's likely future value. Also take into consideration how home size can affect your daily life. Larger homes require more cleaning and maintenance, which can take time away from other activities you enjoy.
Environmental Impact and Design Efficiency
Larger homes generally consume more energy and resources, which matters if environmental concerns are important to you. However, a well-designed smaller home can feel more spacious than a poorly designed larger one, so consider layout and functionality, not just square footage.
Avoiding Common Pitfalls
Emotional and Practical Mistakes
Both upsizing and downsizing can trigger unexpected emotional responses. Leaving a home filled with memories or letting go of possessions during downsizing can be difficult. Many people also make the mistake of overlooking hidden costs like moving expenses, new furniture, landscaping, and potential renovations.
Avoid hasty decisions by taking the time to research neighborhoods, visiting potential homes at different times of day, and honestly evaluating how the space will work with your lifestyle. Remember that the right choice is the one that aligns with your financial reality, lifestyle preferences, and long-term goals.
Making Your Decision
We suggest creating a detailed list of your needs versus wants, and be honest about your budget. Visit different sized homes to get a true sense of what different spaces offer. You can consult with a financial advisor to understand the long-term implications of your housing choice.
Most importantly, remember that a home should be a place that supports the life you want to live, not one that creates unnecessary stress or financial strain.