Once you’ve gone through the juggernaut of being part of the labor-intensive workforce and finally get the chance to retire, why shouldn’t you reward yourself with your dream retirement home?
For retirees who’ve already paid off a home or are tired of renting, the golden years might seem like the ideal time to buy a new house that’s smaller or more conducive to aging in place. The problem is, real estate transactions, especially in 2026’s housing market, usually require a big cash commitment (plus high interest) at a time when you need to be budgeting carefully.
Before making the move, it’s important to understand the potential downsides. Below, experts explain four reasons why you should not buy a house in retirement.
1. It Could Tie Up Your Income
While owning a home can offer stability, real estate purchases in retirement often come with significant financial risks. High upfront costs, ongoing maintenance, property taxes and reduced liquidity can put pressure on retirement savings at a time when protecting cash flow and minimizing risk are critical. Even retirees who have paid off a previous home may find buying again disrupts long-term retirement financial planning and puts real strain on fixed income.
Adding in a new mortgage in retirement, along with the subsequent costs of homeownership, could eat up a big chunk of your likely more modest income, according to Kristina Chervenka, COO, certified portfolio manager (CPM) and co-founder of Five Buffalo Capital, LLC. A home purchase can also tie up liquid funds needed for other things.
Eli Pasternak, real estate agent, investor and founder of Liberty House Buying Group, said he’s seen clients over 65 who regret buying because they cannot access their equity quickly when medical bills hit. He told us about one client who bought a $400,000 condo with cash at age 68 and wished she’d kept that money invested when her husband needed expensive cancer treatments two years later.
Another downside, according to Brian Rudderow, real estate investor at HBR Colorado, is that “investing a large sum of money in a home can limit the potential returns and flexibility that come with a diversified investment portfolio.”
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2. Insurance Costs Are Increasing
Home insurance is another cost retirees might not factor in before buying a new home in retirement. Insurance is getting more expensive, and in areas prone to catastrophic events such as wildfires and hurricanes, some insurers are even dropping homeowners.
“Accidents happen, so insurance and the average annual increase should be factored into the cost of homeownership,” Chervenka said.
3. Property Taxes Are for Life
Chervenka pointed out that even with property tax homestead exemptions and grandfather clauses, many areas in the U.S. have seen increases in property taxes as home values have appreciated. Property taxes persist for the life of the house, so unlike a mortgage which can be paid off, a new home purchase can add costs if it’s in a more expensive area.
4. Increased Home Maintenance Costs
Homeownership comes with additional maintenance costs that add up, Pasternak said. Older homeowners may also struggle with the physical demands of property upkeep while living on fixed budgets.
“I think you should avoid the stress of homeownership, however, because roof replacements cost $25,000 and HVAC systems fail at the worst times,” Pasternak said. Most retirees can’t afford these surprise expenses without going into debt or selling investments.
Renting, on the other hand, places the risk of large maintenance expenses on the landlord. Chervenka said, “Having a landlord and property management team to rely on can relieve stress for those retirees who want the freedom that renting can provide.”
Don’t forget: If you move into a community with a homeowners’ association (HOA) or condominium association, you may have to pay additional fees on top of a mortgage and property taxes. In some states like Florida, these fees can change annually.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 4 Reasons You Should Not Buy a House When You Retire
