If faced with an unexpected financial burden, the majority of home owners say they’d reduce their housing costs by downsizing, according to a survey conducted by Trulia of more than 2,000 Americans. The survey sought to find out what home owners would do with their homes if faced with a major financial hardship – such as losing a job or unexpected medical bill.
Nearly two in five people – or 38 percent – said they’d move to a smaller home to cut costs. Indeed, twice as many people surveyed said they’d prefer downsizing than the next most popular action: Renting out part of their home to a roommate or housemate.
“Downsizing, in fact, was the top option chosen by every demographic group, beating out all other actions for every age group, income group, and both home owners and renters,” says Jed Kolko, Trulia’s chief economist. “But other cost-cutting actions were much more appealing to some groups than others – with age differences being particularly important.”
For example, millennials, ages 18 to 34, said they’d be more likely than older age groups to move into someone else’s home or rent out part of their own home.
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On the other hand, older adults (35 to 54 years old) were less willing to move and were twice as likely to stop paying the rent or mortgage in order to avoid moving (although few in that age group said they’d actually do that).
Here’s a breakdown of what the survey found for what home owners would do if faced with a financial hardship:
- Move to a smaller home/apartment: 38%
- Rent out part of my home to a roommate/housemate: 19%
- Move to a more affordable neighborhood in the same city, metro area, or region: 19%
- Move to a more affordable city, metro area, or region: 16%
- Move to my parent’s home: 14%
- Move into my children’s (or other relative’s) home: 8%
- Rent out part of my home to vacationers/visitors: 6%
- Live in my car, office, or another place that’s not intended as housing: 5%
- Move into a non-relative’s house: 4%
- I would stay in my current home but stop paying the mortgage: 4%
Source: “Is This the Way to Cut Housing Costs When Facing Hardship?” HousingWire (July 23, 2014)