You are absolutely correct that downsizing stands to lose more money than engaging in some sort of financial stretching or acrobatics, esp in the long run. However, there are times when the situation just doesn't allow you to stretch anymore.
And even if stretching is possible, is that really a good thing? Just because the mortgage payment defaults aren't happening doesn't mean it is a good thing.
A higher interest rate is gonna take anywhere between 1 - 3 years to see its fuller effect on the market and economy. So far, only a year has passed since the rates started climbing.
Quote:
Originally Posted by Alpine
Downsizing can hurt even more than cutting all other expenses/savings/picking up a PT job/gig/airbnb a room and trying to scrape together another $2-3k/month. Once you include the loss of equity from the drop in price + selling commissions + fees and then eventual fees + taxes to buy again you could be out a few hundred thousand.
I have a friend who is in this exact situation. Bought early 2022 and has lost ~$200k in equity. Selling and buying in the future would cost them another $75k in commissions/taxes/fees + rent ($2k/mo minimum).
Instead, they've decided to rent out a bedroom or 2 in their basement to help cover the gap.
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