How Much Could You Save By Downsizing Your Home? Southern Cities Offer the Best Chances For Big Gains
- Downsizing from a four-bedroom to a two-bedroom home frees up an average of $200,000 in net gains, the equivalent of about 55% of the cost of a typical U.S. home.
- Thirteen of the top 20 cities for downsizing gains are in the South, where rising property values make trading down especially rewarding.
- Texas leads the nation with five cities in the top 20, topped by Dallas, where downsizing unlocks nearly $373,000 – roughly 120% of the value of an average local home.
- In high-cost coastal hubs such as Irvine, CA ($900K), San Jose, CA ($715K), and Honolulu, HI ($670K), downsizing delivers the largest dollar gains.
- Self storage plays a key supporting role in the downsizing trend. In 15 of the top 20 markets for downsizing , self storage street rates stand below the national average, offering affordable flexibility for households making the move.
Downsizing in 2025 is less about giving up space and more about regaining financial control amid rising housing costs. The trend is especially relevant for empty nesters and retirees, a group that now numbers over 61 million people – up from 12.4% of the population in 2004 to 18% in 2024. As affordability pressures mount nationwide, many baby boomers are seeking homes that are easier to maintain and better suited for aging in place.
Yet the appeal of living smaller extends well beyond retirees. Facing high housing costs and ongoing economic uncertainty, millennials and Gen Z are increasingly embracing downsizing as a path toward a more intentional lifestyle – one that prioritizes financial stability, flexibility, and the experiences that matter most.
Whether you’re eyeing retirement or just trying to get ahead financially, which markets make downsizing truly worth it?
To find out where it really pays to shrink your home’s footprint, we created a Downsizing Gains Index*, which considers the key costs and savings involved in trading a larger home for a smaller one across the 90 largest U.S. cities.
*We compared the price difference between a four-bedroom and a two-bedroom home, added 10 years of property tax savings, and subtracted typical closing costs along with the cost of renting self storage — a popular way to make up for lost space without the stress of clutter. Finally, we compared those savings to the average home price in each city to highlight where downsizing offers the best value for your money – and to reveal the markets that truly reward living smaller.
Where downsizing unlocks the biggest savings
According to our research, selling a larger home and moving into something smaller can unlock significant savings in many markets — especially in cities with strong local moving activity and newer housing stock. Places like Dallas, TX, Tampa, FL, and Raleigh, NC, make it easier for homeowners to scale down without uprooting their lives — allowing them to stay close to family, friends, and familiar amenities while freeing up hundreds of thousands of dollars in equity. That money can help pay off debt, strengthen retirement savings, support new investments, or finally make that long-postponed sabbatical a reality.
Nationwide, the average financial gain from downsizing exceeds $200,000 – roughly 55% of the cost of a typical American home.
Across much of the South, downsizing goes further. When measured against local home prices, 13 of the 20 best cities for savings are in Southern states, where fast-growing suburban home values make moving to something smaller a big financial win.
Explore our interactive chart below to see how much equity you could unlock in your city by moving from a four-bedroom to a two-bedroom home – or discover how your savings change when downsizing from one city to another.
While downsizing can absolutely lead to major financial and environmental benefits, it’s worth acknowledging that the move isn’t always as simple as trading space for savings. How much you actually get to keep often comes down to the finer details — from what’s available on the market and the timing of your sale to whether you’re taking on a new mortgage or moving into a rental.
For instance, selling a home for a large profit could push your income higher for the year, potentially triggering steeper Medicare premiums or making a bigger portion of your Social Security taxable — something many retirees never see coming. Others downsize expecting big monthly savings, only to find that HOA fees or more frequent dining out offset their planned budget cuts.
And then there’s what you do with the proceeds. Parking that freed-up cash in a low-interest account might feel safe, but it can quietly cost you thousands in lost growth — especially during a market upswing. On the flip side, a little planning — such as keeping a small mortgage for tax benefits or using your equity to fund a side business — can make those savings work much harder.
Bottom line: In many markets, the numbers do add up — but the real advantage often lies in the planning, starting with the market where you’re looking to downsize. Here’s a deeper look at the top 10 places where downsizing could help you move out — and move on — faster.
Downsizing goes big in Texas
- Dallas tops the list, with four other Texan cities in top 20
Texas has emerged as the epicenter of downsizing savings, placing more markets in the top 20 than any other state. In a region long known for big houses and steady in-migration, the scale of financial gains from trading down stands out.
In Dallas, property taxes on large single-family homes are among the steepest in the country. Effective rates hover near 2.2% – nearly twice the national average – reflecting Texas’s reliance on property taxes in the absence of a state income tax. For households that don’t truly need the extra space – whether empty nesters, retirees, or young families with one or two children – downsizing offers both financial relief and lifestyle upgrades.
Moving from a four-bedroom to a two-bedroom home in Dallas unlocks nearly $373,000 in savings, equal to about 120% of the cost of an average local home.
Many sellers of oversized properties in neighborhoods like Highland Park can choose smaller townhomes, duplexes, or condos in Uptown, Oak Lawn, or the Bishop Arts District, where upkeep is lighter and walkable access to restaurants, parks, and cultural venues enhances daily life. The city’s ForwardDallas 2.0 plan, which opens the door to more duplexes and townhouses in traditionally single-family areas, further supports this shift, making smaller homes more available to those seeking flexibility. That combination of equity gains and ongoing savings places Dallas first nationally for downsizing benefits.
Lubbock, also in Texas, ranks second nationwide for downsizing savings — welcome news for locals facing slowdowns in the Permian Basin’s oil industry, the region’s economic backbone. Homeowners aiming for financial resilience can unlock over $229,000, or more than the cost of the average home in the area.
Much of Lubbock’s housing stock consists of large ranch-style homes on expansive lots, particularly in neighborhoods like Kings Park. Downsizing often involves moving into newer, smaller homes in developments like Bushland Springs or into compact properties closer to Texas Tech University and the medical district. These choices reduce upkeep and utility costs while keeping residents close to jobs, health care, and cultural life anchored by the university. For households with belongings that won’t immediately fit into smaller spaces, renting a Lubbock storage unit averages about $108 per month — an affordable way to stay flexible while capturing the financial benefits of downsizing.
In Irving, a key city within the Dallas–Fort Worth metroplex and a major corporate corridor, downsizing also pays off. Trading a four-bedroom home for a two-bedroom one can unlock more than $296,000 in net gains, equal to 86% of the cost of the average local home.
That prospect appeals especially to the city’s young professionals in tech and aviation, who often prefer smaller homes that free up both time and money. Las Colinas Urban Center, one of the nation’s first master-planned communities, exemplifies this shift, offering newer condos and townhomes at lower price points than large suburban houses farther out. Downsizing here means shedding space, reducing taxes and maintenance, and gaining walkable access to restaurants, parks, and trails.
Corpus Christi ranks 13th among the best U.S. cities for downsizing gains. Moving from a four-bedroom to a two-bedroom home can free up nearly $161,000, or about 72% of the cost of the average local home. Economic realities add to the appeal: with the city’s port-driven economy tied closely to the energy sector, periods of volatility can create financial uncertainty. Downsizing into a modest property provides a financial buffer, lowering monthly expenses while preserving flexibility.
In San Antonio, relocating from a four-bedroom home to a two-bedroom one can unlock over $179,000 in gains, amounting to 70% of the average local home’s value. Many of the city’s larger properties are found in outer-ring master-planned communities that come with long commutes and HOA fees. Increasingly, downsizers can opt for historic two-bedroom homes in central neighborhoods, where maintenance is lighter and additional amenities are just steps away.
From Tulsa to Tampa, other Southern cities unlock downsizing windfalls
Outside Texas, other Southern markets stand out for downsizing gains, banking on the balance between affordability and lifestyle appeal. In many of these cities, both home prices and general living costs are lower than the national average, which means that the funds freed by downsizing represent a much larger share of the typical local home, and the cash–out is often enough to reset a household’s financial footing entirely. At the same time, these cities are seeing renewed interest in revitalized downtowns, historic districts, and walkable neighborhoods, where smaller homes are more prevalent in the housing stock.
Down in Oklahoma, both Tulsa and Oklahoma City offer fertile ground for downsizing gains. Tulsa rounds out the national podium with more than $188K in potential savings from trading a four–bedroom for a two–bedroom home. That sum equals about 88% of the cost of the average local property, a remarkable ratio for homeowners looking to unlock equity. Coupled with the city’s ongoing urban revitalization, the shift from spacious suburban ranch houses to historic two–bedroom homes closer to downtown can deliver not just financial benefits, but also greater convenience.
Much of the same can be said about Oklahoma City, where urban infill housing is becoming a viable option to suburban sprawl. A surge in duplexes and attached homes has made two–bedroom options more plentiful in the central districts. Downsizing gains in OKC amount to almost $177K, or 86% of the cost of the average home in the city.
Memphis, TN, ranks fourth nationally for downsizing gains. Moving from a 4–bedroom home to a 2–bedroom one can bring a net benefit of $125K, which covers about 86% of the price of an average local home. Downsizers can target neighborhoods such Midtown or Cooper–Young, where cozy cottages and bungalows dominate. Beyond financial relief, living smaller here means being steps away from music venues and barbecue joints.
North Carolina claims three spots in the top 20. In Greensboro, downsizing frees about $223K, or 85% of the cost of an average home. Larger suburban houses line up areas like Lake Jeanette or Friendly Lakes, while downtown condos and cottages near Elm Street or College Hill offer a more manageable option. With Cone Health and the city’s universities among Greensboro’s largest employers, many educators and health care workers find that moving smaller not only eases costs but also brings them closer to their jobs.
Nearby Winston–Salem shows nearly $187K in downsizing gains, or 72% of an average home. For many, downsizing is a way to exchange the upkeep of bigger houses for a simpler lifestyle in the city’s cultural core. Whether it’s volunteering, attending festivals, or enjoying local cafes, smaller homes make it easier to participate in the life of the city.
Raleigh produces one of the South’s highest cash–outs: $279K, equal to 63% of an average home. For professionals tied to Research Triangle jobs, downsizing often means moving closer to work, reducing commute times, and freeing up more time and money for family or hobbies. Renting a self storage unit in Raleigh, which averages about $119 per month, certainly helps make that new lifestyle possible, allowing households to live smaller day to day without giving up the space for gear, keepsakes, or seasonal items.
On Florida’s Gulf Coast, downsizing also delivers some hefty cash rewards. In St. Petersburg, moving smaller frees nearly $300K, or 73% of the average home price. Here, mid–career professionals often lead the shift, cashing out of inland homes in favor of condos and cottages near the bay.
In Tampa, downsizing yields about $257K, or 68% of a standard home’s cost, and helps trim not just housing expenses, but also steep insurance premiums. Smaller homes and condos near the Riverwalk or in South Tampa often come with newer construction and easier upkeep, letting residents stay close to family, sports, and cultural life while keeping costs more manageable.
Honolulu – downsizing pays big in paradise
Honolulu stands out with some of the nation’s largest downsizing gains: about $670K, translating to 89% of the cost of an average local home. In one of the country’s most expensive and space–constrained markets, selling a hillside single–family home can unlock extraordinary equity. Many downsizers can consider neighborhoods like Moʻiliʻili or Makiki, where condos and compact single–family homes provide more affordable options close to the University of Hawaiʻi, hospitals, and downtown jobs. These areas also offer easy access to daily conveniences like grocery stores, small parks, and walkable streets, making urban living more practical.
Urban revival makes downsizing worthwhile in the Midwest
In the Midwest and Great Plains, downsizing pays off due to a blend of affordability and urban revival. These are regions where space has never been in short supply, yet selling a four–bedroom home often frees enough equity to buy a smaller two–bedroom and still have cash left over, amounting to a sizable share of the average local home’s value.
In Kansas City, downsizing often means leaving behind grand homes in areas like Ward Parkway or Mission Hills and moving into smaller, more manageable residences in neighborhoods such as Brookside or West Plaza. The financial payoff is substantial – around $205,000, or about 81% of the cost of an average local home – but the lifestyle shift is equally meaningful: less upkeep, more proximity to urban amenities, and greater ease navigating city life.
Living in Wichita also comes with major financial perks for potential downsizers. Homeowners who trade spacious ranch houses in the outer suburbs for compact townhomes or condos find it easier to reach health care centers, museums, and performing arts venues. The move releases about $143,000 in equity, or roughly 71% of a local home’s cost, a windfall that can support retirement, travel, or family investments.
Omaha’s downsizing appeal lies in the balance it offers: a strong housing market, manageable costs, and a lively urban core. Downsizers here can swap suburban properties for Dundee’s craftsman bungalows or condos near the Old Market. The financial advantage is remarkable: About $190,000, or 65% of an average home’s cost, but the real draw is combining financial security with a lifestyle that’s both connected and convenient.
Downsizing gains new appeal in Oakland
In Oakland, downsizing is closely tied to the Bay Area’s affordability crunch. Selling a hillside four–bedroom after years of appreciation can unlock nearly $596,000 in equity, or about 82% of an average local home’s value, while also avoiding the steep costs of earthquake retrofits and upkeep that many older homes require.
Homeowners often trade sprawling properties for smaller condos or townhomes in areas like Adams Point or Fruitvale, where access to BART shortens commutes and makes car–free living possible.
From big houses to big savings in the Rust Belt
In the Rust Belt, spacious homes built during the manufacturing boom remain a staple of the housing stock, but smaller properties are gaining new appeal. Revitalized downtowns are drawing people closer to the core, where condos, townhouses, and compact single–family homes offer convenience without burden.
Downsizing in Pittsburgh, PA, can free up about $183K, which is 75% of the cost of an average local home. For many, that means selling a larger home and moving closer to the city’s economic and cultural engines – universities, hospitals, and a growing tech sector. The move offers easier access to the city’s theaters, museums, and sports venues. From retirees to young professionals, many people see the appeal of living closer to care and culture in the urban core.
Fort Wayne, IN, presents a different narrative of the Rust Belt’s downsizing story. Here, selling a four–bedroom and moving into a two–bedroom home generates around $144,000 in net benefits, or 59% of the average local home price. While the financial figure is smaller than in Pittsburgh, its impact is magnified by the city’s affordability. The equity freed can fund retirement or investment in new local ventures.
Sticker shocker: Where moving smaller means pocketing the biggest savings
When it comes to sheer dollar gains, downsizing delivers its biggest payouts in some of the country’s most expensive housing markets. The top 10 cities for total equity unlocked are dominated by California, where sky-high property values create an enormous gap between four- and two-bedroom homes.
Places like Irvine ($900K), San Jose ($715K), and San Francisco ($595K) all rank near the top, reflecting both the premium commanded by large suburban homes and, by comparison, the relative accessibility of smaller condos and townhouses. While buyers in these metros face some of the steepest barriers to entry, longtime homeowners who have seen property values climb for decades can now unlock life-changing liquidity by downsizing.
Seattle, WA, another West Coast hub where tech-fueled demand has driven home values skyward, also lands among the top 10 — with potential downsizing gains of about $418K. For homeowners there, the financial incentive to trade space for equity is hard to ignore.
Washington, DC, joins the list as well, thanks to its steady demand, limited supply, and historically strong property appreciation. Large rowhouses and detached homes in established neighborhoods command high prices, and trading one for a smaller townhouse or condo can yield six-figure savings.
Downsizing finds an ally in self storage, where costs barely top $1.3/sq. ft.
As housing costs push more Americans to live smaller, self storage has quietly become the safety net of the housing market. The industry now plays an unlikely but essential role in the downsizing wave, giving people space to right–size their budgets without sacrificing their belongings or lifestyle. In fact, downsizing is one of the classic “6 Ds” of self storage demand – alongside dislocation, divorce, death, distribution, and decluttering.
For most downsizers, affordability remains the primary driver, and the storage market largely caters to it. Renting a small storage unit costs roughly $137 per month nationwide, or approximately $1.3 per square foot. Additionally, 15 of the top 20 cities with the highest downsizing savings also boast street rates below the national average. That helps homeowners maximize the equity gains from selling a larger property without having to part with useful or sentimental items. Self storage offers a place for family heirlooms, seasonal gear, and personal keepsakes to stay safe while households adjust to a more manageable living space.
Among the top-performing markets, Memphis, TN, stands out as the most affordable city for self storage, with an average rent of just $87 per month. The low cost provides a practical buffer for households shifting from larger suburban homes to compact residences closer to the city’s cultural core. Other metros, such as Oklahoma City, which enjoy both strong downsizing gains and affordable storage, also feature average rates below $100.
Even in Greensboro, NC, where downsizing can unlock well over $200,000 in equity, access to below–average storage rates helps bridge the space gap, proving that affordability and adaptability can coexist in today’s housing market.
Below, explore how much it costs to rent self storage across the country’s best cities for downsizing gains – and see where space still comes at a reasonable price.
Self Storage Rates Across Top U.S. Cities for Downsizing Gains
*Self storage rates refer to all unit sizes.StorageCafe analysis of data from Yardi Matrix. (Data as of Aug. 2025 | Pub: Oct. 2025).
Beyond the sale: What experts say about downsizing the smart way
Downsizing can be a smart financial move, allowing homeowners to unlock equity, lower monthly expenses, and simplify their lifestyle. But to make the most of it, it’s important to look beyond the sale price and purchase cost. A few broader financial factors can have a big impact on how much you ultimately gain.
Taxes are one key consideration. Selling a longtime home may trigger capital gains, and that extra income can affect your overall tax picture, from your tax bracket to the share of Social Security benefits that become taxable. Understanding how much of your gain qualifies for the federal home-sale exclusion and timing your sale accordingly can help minimize surprises.
Mortgage rates also play a role. Paying cash for a smaller home eliminates debt but can reduce your flexibility, especially when investments may offer higher returns than current mortgage costs. Keeping a modest loan and investing some of the freed-up equity can, in some cases, improve long-term outcomes.
Ultimately, the key to maximizing downsizing gains lies in planning how to put your equity to work, whether that means investing for growth, paying down other debts, or boosting retirement savings. With thoughtful preparation and good timing, downsizing can be both financially rewarding and personally freeing.
We asked financial, tax, and real estate experts to share what homeowners should keep in mind to make the most of their move to a smaller home:
David P. Fritch, Lead Attorney, Fritch Law Office
I’ve worked with small business owners for 40 years as both a CPA and attorney, plus spent 20 years as a registered investment advisor, so I’ve seen every angle of these transitions. The downsizing conversation comes up constantly with my clients approaching retirement.
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Here’s what almost nobody considers: the tax torpedo from selling your primary residence. Most people know about the $250K/$500K capital gains exclusion, but I had a client who sold their $600K home, banked a $350K gain, then got hammered because it pushed them into higher Medicare premiums (IRMAA) for two years and made more of their Social Security taxable. It cost them about $8K they never saw coming. If you’re close to those thresholds, sometimes it’s smarter to sell in a year when your other income is lower or even consider a charitable remainder trust if you’re charitably inclined anyway.
The freed-up cash mistake I see most? People park it in savings “temporarily” while they figure things out, then inflation eats 3-4% annually while they’re getting 0.5% interest. One couple I worked with freed up $200K from downsizing but waited 18 months to invest it. It cost them roughly $35K in opportunity lost during a market recovery. My rule from managing client portfolios: have your investment strategy mapped out before you close on the sale, even if it’s just a simple three-fund portfolio. Don’t let emotional decisions about “keeping it safe” rob you of compound growth.
The hidden cost that kills people is underestimating their true ongoing expenses in “cheaper” living. I had clients move from a 3,000 sq ft house to a 1,200 sq ft condo thinking they’d save a fortune. Their property taxes and utilities dropped, sure, but the HOA was $485/month, they lost their workshop so started renting storage and they ate out constantly because the tiny kitchen drove them crazy. Their actual monthly savings? About $200, not the $1,200 they projected. Track your real lifestyle costs for 90 days before deciding how much home you actually need.
Courtney Epps, Professional tax strategist and consultant, OTB Tax
I’m a tax strategist who’s spent 19 years helping everyone from startups to $100M companies, and I’ve worked with dozens of clients through downsizing situations. Here’s what nobody talks about: the tax structure of how you own your new property matters way more than the property itself.
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Most people downsize and buy their smaller home outright because it “feels safe”. I had a client couple sell their $650K home, pocket $400K in equity, and buy a $250K condo cash. Huge mistake. They lost access to mortgage interest deductions and tied up capital that could’ve been working for them. We restructured them into a small mortgage, redirected that freed-up cash into their existing side business (she did consulting, he had rental properties), and suddenly $150K of what would’ve been locked in home equity became business deductions. They saved $8,400 in taxes the first year alone.
The hidden cost everyone misses: moving from a house to a condo or HOA property means you’re trading deductible expenses for non-deductible ones. Your old home’s repair costs could partially offset business income if you had a home office, but HOA fees? Not deductible for most people. Before you downsize, calculate what you’re actually losing in write-offs. I’ve seen that swing be worth $3K-5K annually in lost deductions.
If you’re downsizing with any kind of side income or business, even part-time, set up your new smaller space to maximize your home office deduction from day one. I teach clients the 45-minutes-a-day, 3-5-days-a-week rule to qualify for business deductions. That approach turned one client’s downsizing “savings” from $200K in equity into $200K plus an extra $6,800 in annual tax savings that keeps compounding every single year.
Jimmy Fuentes, Consultant, California Hard Money Lender
When it comes to downsizing, the timing of the sale is crucial. I have seen clients walk away six figures better off just by listing in late spring when there is a tightness in the inventory and the buyers are motivated. Check your property prior to listing in order to resolve any problems beforehand instead of during the talks where buyers would use it as leverage points.
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Things get interesting when you factor in capital gains exclusions. Single filers can exclude up to $250,000 in gains, while married couples can exclude up to $500,000, provided they’ve lived in the home for at least two of the past five years. Some sellers are also unaware that they may be able to defer taxes if they’re moving into an investment property.
Another important point: how you structure your sale and purchase can make a big difference. One of my clients negotiated a 60-day rent-back agreement on their sale, which allowed them to close on their new, smaller home without carrying two mortgages or rushing to find temporary housing. That move alone saved them an estimated $8,000 in bridge financing and relocation costs.
In California, sellers should also be aware of transfer taxes — typically $1.10 per $1,000 of the sale price, with some cities adding their own transfer taxes on top of that. In certain Bay Area markets, these extra costs can add up to more than many sellers expect.
HOA fees are another area to watch. In some smaller properties, especially condos, monthly HOA payments can actually exceed what you were paying in property taxes on your larger home. I’ve seen downsizers move into condos thinking they’d save money, only to be surprised by high monthly fees and occasional special assessments. It’s always smart to review the HOA’s financial statements and confirm that they maintain a healthy reserve fund.
Finally, keep in mind that not all home improvements recoup their full cost. A kitchen remodel, for instance, may only return a portion of what you spent, depending on buyer preferences and comparable sales in your area.
How downsizing fits into today’s housing reality
To put today’s downsizing trends into perspective, we spoke with financial and real estate experts who study the market and understand how shifting economic conditions are shaping homeowner decisions.
Fernando V. Ferreira, Real Estate Department Chair, The Wharton School, University of Pennsylvania 
1. Is downsizing today more about necessity or choice — and how is that dynamic shifting across age groups?
Downsizing is typically a choice, such as when children leave for college or when suburban families decide to move closer to urban centers. However, it can become a necessity when households experience negative income shocks, such as a job loss or other financial setbacks.
2. What’s your advice for homeowners who want to downsize but are currently locked into historically low mortgage rates?
If the downsizing gains are substantial, it may still make financial sense to move forward with it now. A significant reduction in home size and cost can often offset the impact of higher mortgage rates compared to staying in a larger, more expensive home that costs more to maintain and carries higher property taxes.
3. Looking ahead, do you expect downsizing to remain a major trend over the next decade, or is it more of a short-term reaction to affordability pressures?
Downsizing is likely to remain a long-term trend. New families and young adults are increasingly starting out in smaller homes or apartments due to affordability challenges, especially in high-cost “superstar” cities — a pattern that’s unlikely to change over the next decade.
R. Kelley Pace, Professor, Department of Finance & Director Real Estate Research Institute, Louisiana State University
What are some of the factors that influence downsizing decision-making?
In addition to low mortgage rates, a few other factors may influence downsizing. First, some property tax exemptions are keyed to income at the time of application. If income has increased, the new house might not benefit from that exemption. In addition, some properties that have not been sold in many years have overly low valuations, which also reduces property taxes. Although a couple can exclude up to $500K in capital gains from the sale of a primary residence for federal taxes, owners in some areas have had gains exceeding this amount.
If the property is held until death, a step-up in basis occurs, and the heirs do not need to pay taxes. Note that there are state variations. For example, Pennsylvania does not allow for the exclusion. Other states, such as California, New York and Illinois, tax any gain over the exclusion as ordinary income. Even for federal taxes, capital gains over $500K could trigger the net investment income tax at a 3.8% rate. In conclusion, many factors could influence a decision to downsize.
Conclusion
Trading excess space for smaller, more efficient homes not only frees substantial equity but also reduces ongoing costs and supports lifestyles centered on convenience, community, and flexibility. For many Americans, the shift towards living in smaller homes is proving to be a bigger opportunity than ever before.
Methodology
This analysis was conducted by StorageCafe, an online platform providing storage unit listings nationwide. For this report, we evaluated 90 of the country’s largest urban areas and ranked them by a Downsizing Gains Index potential downsizing gains.
To calculate this index, we calculated the equity unlocked by selling a four–bedroom home and purchasing a two–bedroom home in the same city.
From the resulting equity, we subtracted the typical closing costs associated with both the sale and purchase transactions. Closing costs were estimated at 8% of the average value of a four–bedroom home (selling) and 3% of the average value of a two–bedroom home (buying).
We also subtracted 10 years of self storage rent, based on each city’s average street rates, to account for the practical needs of households moving into smaller homes.
We factored in 10 years of property tax savings, reflecting the lower carrying costs of a smaller home.
Property tax estimates were derived as follows:
- Median taxes for four–bedroom homes were calculated by multiplying the median taxes across all properties by the ratio of four–bedroom home values to all home values.
- Median taxes for two–bedroom homes were also calculated by multiplying the median taxes across all properties by the ratio of two-bedroom homes to all home values.
The 10– year savings were then calculated as the difference between the median taxes for four- and two-bedrooms homes two, multiplied by ten.
We expressed net downsizing savings in two ways:
- Dollar amount – the total cash freed by moving from a four–bedroom to a two–bedroom home.
- Downsizing Gains Index (relative measure) – the gains as a share of an average home’s value in each market, to show the scale of gains in the local context.
Cities were ranked according to the Downsizing Gains Index, highlighting where downsizing delivers the greatest benefits compared to local housing costs.
Home value data was sourced from Zillow (July 2025 data set) while tax data came from the U.S. Census Bureau (2024 data set).
Self storage data was provided by StorageCafe’s sister division, Yardi Matrix, a comprehensive business development and asset management tool serving brokers, sponsors, banks, and equity sources across multifamily, office, industrial and self storage sectors.
Fair use and distribution
This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.
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Small Apartment Storage Ideas: How to Maximize Space and Make It Feel Like Home
Living in a small apartment doesn’t mean settling for cramped or chaotic. With the right systems in place, even limited square footage can feel organized, functional and surprisingly comfortable.
10 Small Bathroom Storage Ideas to Maximize Your Space
Your bathroom is one of the most frequently used areas in your home, which makes it especially prone to clutter. Toiletries build up quickly, towels multiply, and laundry bins can easily overwhelm the room, particularly in a compact layout. If you’re working with limited square footage, the right small bathroom ideas can help you stay organized without sacrificing style.