EVERYTHING IS GOING SWIMMINGLY: Why downsizing will cost homeowners MORE: Soaring house prices and elevated mortgage rates mean retirees can no longer afford to move.

Downsizing has traditionally made sense for retirees looking to settle down and shore up their nest eggs for their later years.

But moving to a smaller home may no longer be a way for Americans to save money in the current market, experts warn.

The average 30-year fixed-rate mortgage has soared to 7.49 percent, according to latest data from lender Freddie Mac, while many homeowners are locked into much cheaper 2 or 3 percent deals on their current homes.

Meanwhile the number of smaller houses for sale has diminished in recent years, according to listing website Realtor.com – pushing up the price of the limited inventory on the market.

The number of properties for sale that measure 750 to 1,750 square feet – the size range people who are downsizing tend to purchase – has dropped by more than 50 percent since 2016, according to Realtor.com.
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Downsizing is most expensive for those who are locked into historically low mortgage rates – and who would need to take out a loan on a smaller home.

They might not be able to afford to stay, either, as property taxes go nowhere but up on their appreciating homes.