In America, housing affordability rates are at their lowest level in 40 years and U.S. households’ credit card debt is at an all-time high.
This is not a good combination for anyone looking to buy a home. Given this, it’s no wonder that many Americans are feeling the financial pinch.
But despite the current economic challenges, owning a home remains a cornerstone of building wealth and a cherished dream for many.
With that as the backdrop, I’d like to offer you a helpful thought:
You’ll probably be happier living in a smaller home than a larger one.
This is a very different message than we get from the culture around us.
In today’s society, where bigger is often seen (and portrayed) as better, the belief that a bigger house is better than a smaller one affects much of our thinking and house-hunting.
As a result, we dream of owning the large home in the gated community. We compare our income to a potential mortgage payment seeing how much we can afford to determine how much we can buy. And real estate agents are tempted to show us houses at the very top of our price range.
At almost every stage, the temptation is to buy bigger and bigger. No wonder the average home size in America continues to grow—even while the average family size shrinks.
I’d like to argue a counterpoint to the current assumption in America.
Thirteen years ago, during a family move from Vermont to Phoenix, my family and I made a conscious decision to purchase a smaller home, even though we had the financial means to upgrade significantly. Today, we couldn’t be happier with our decision. In fact, we have never regretted it for a moment.
Here are seven compelling reasons why you’ll love living in a smaller home.
1. Easier Maintenance
Anyone who has owned a house knows the amount of time, energy, and effort required to maintain it. From cleaning and upgrades to repairs and maintenance, caring for a home requires mental and financial energy.
A smaller home simplifies these tasks, requiring less of your time and resources. This means you’ll have more time to focus on activities and relationships that truly matter. Your family will remember far more the time you spent with them than the square footage of their bedroom.
2. Reduced Expenses
Everything being equal, smaller homes are less expensive to both purchase and maintain. The costs of insurance, taxes, heating, cooling, and electricity are all lower.
This financial freedom allows you to use your money elsewhere, such as paying off debt, building an emergency fund, investing in your future, or enjoying memorable experiences.
*As a side note, I should mention that upgrades in a smaller home are much less expensive as well. For example, when our smaller home needed new carpet, we were able to get a higher-quality floor covering across our entire home for less than the price of a cheaper carpet for our larger home because there was less square footage to cover.
3. Less Debt, Less Risk
Most financial advisors suggest spending no more than 28% of your monthly gross income or 25% of your net income on your mortgage payment. By choosing a smaller home, you can reduce this percentage significantly, resulting in less financial risk and stress. Imagine the peace of mind that comes with knowing you’re not stretched thin by your mortgage payments for the next 30 years…
4. Environmental Impact
Smaller homes have a smaller environmental footprint. They require fewer resources to build and maintain, which benefits the planet. By living in a smaller space, you’re contributing to a more sustainable future for everyone. Additionally, less space means fewer items stored inside, reducing waste and the constant cycle of consumption.
5. Mental Freedom
As is the case with all of our possessions, the more we own, the more they own us. And the more stuff we own, the more mental energy is held hostage by them.
The same is absolutely true with our largest, most valuable asset. Buy small and free your mind.
6. Enhanced Family Bonding
An interesting phenomenon occurs as a family grows. The natural assumption is that when we begin having children, the size of our home needs to increase. And while I’m not arguing that’s never the case, our grandparents raised much larger families in much smaller homes and there were long-term benefits from it.
Think of it: a smaller home naturally encourages more interaction among family members and helps deepen and enrich relationships. In larger homes, it’s easy for everyone to retreat to their own spaces, leading to less family time together. We may think more space in the short-run is what our family needs most, but the long-term consequences may be greater than we think.
7. Greater Marketability
Smaller homes are generally more affordable and appeal to a larger segment of the population. This broader market makes smaller homes easier to sell when the time comes. Whether you’re downsizing or relocating, the flexibility and marketability of a smaller home can be a significant advantage.
Thirteen years ago, we saw an opportunity to downsize the size of our home and embraced it entirely. Our family of four reduced our home size from over 2,300 square feet to less than 1,600 square feet, and with that, our mortgage payments decreased by almost 50%.
This decision, for us, wasn’t just about financial savings. It was about choosing quality over quantity and freeing ourselves from the burden of unnecessary possessions. Living in a smaller home has allowed us to focus on what truly matters—family, experiences, and both personal and spiritual growth.
If you’re feeling the financial strain of housing costs or simply looking for a way to simplify your life, consider the benefits of downsizing. You’ll love living in a smaller home.
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