Reply to Americans locked into lower mortgage rates have been increasingly unwilling to sell their homes.

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Downsizing makes very little sense. By the time your last one out of college and you and your wife retired people are between 60-70.

My house for instance is worth 1.7 million with 375k on mortgage.

I plan on retiring at 67. By then mortgage is maybe 250k.

To sell I pay 
$85,000 commission
$20-25k prepping house for sale and home inspection things. 
$10k closing fees. (Transfer tax, recording fees etc.)
$10k moving fees and misc
$20k closing costs new home
$20k misc repairs upgrades to new house.

I am at $175k to “downsize”

Nearly all of that money I never get back.

Let’s say I down size at 70. Even a 1k a month savings is going to take me 175 months to break even, or 14.5 years.

So old people sit in big homes. Remember the old people have landscapers, handiman and mostly mortgage free.

And with homestead exemptions taxes in the new smaller home could be more

[/quote]

The only way this makes sense is if you are primarily (or exclusively) concerned with net worth in retirement.  
I am not.  [/quote]

I am not. But I may just keep my big house and buy a smaller condo in a beach town. Do you really think at age 70 I want to sell a 6,1000 sf house? My neighbor has a 7,000 sf house at 80 and his wife 78. He is in great health but made a whole master squire with bath on main level for him and wife. Upstairs he never goes but the five bedrooms and three baths upstairs are when kids and grand kids visit. The two bedrooms one bath in basement will be if they need live in help. He has 8 bedrooms. But he is a rare 48 years same house in MoCo and qualified for the over 65 and 40 years in same house tax break.

Sounds crazy but he paid $150k in a house worth 1,8 million. If he sold cap gains would be crazy [/quote]

Yes, good point about the capital gains. If he lives in the house until death, heirs would get a new stepped-up basis and could sell with no capital gains tax. [/quote]

And that describes 50 percent of my block in Potomac. I have multiple neighbors who bought between 1975 and 1999. Big gains and no mortgage.

Plus I bought my large home empty Nestor. It has two zones HVAC for heat/AC. One bottom two floors and one top floor. I was surprised at low utility bill prior owner showed me. But he said they moved TV room upstairs and downstairs heat/ac pretty much shut off 8pm to 8am every day.

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