Congratulations, so happy for you as I recall it’s something you’ve been working towards.
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We sold our paid-off home, bought a lot in the place we want to move, and are currently renting an apartment in our old neighborhood (near the grandbabies). We put house proceeds into high interest account and a short term CD, and I was surprised to find that the interest on that money more than covers our rent! That money will all go away-wheeeee- when our modular homes are built in the spring. We will have a multigenerational property with ADU for us and larger home for daughter and her family.
Apartment living is okay, but it just doesn’t feel like home. Maintenance, yard work, taxes etc are a pain, but I want to live in a home I own.
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Anxious mom - okay, you have my dream situation 
My son wants to buy land in beautiful western state that I also love - I’ve been looking at cute (log cabin type) modular homes for years, and would love it as an ADU on son’s property if he goes in that direction (and son would like, lol).
Only add would be hub likes warm weather - so in a perfect world we’d rent out the ADU for a few winter weeks/months and do Air BnBs in Mexico or other beachy locale when home state is chilly (it’s place lots of people like to go in winter).
Good for you - and please keep us posted on your new, modular home! 
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Unfortunately, with inflation, downsizing is still upsizing.
I don’t really see how that could possibly be the case. Sure if you are going from a 2.5% loan to a 7.5% loan the cost of money is higher, but if you buy a smaller home and sell a bigger home the smaller home should be less.
Yeah, you’d think so.
Unfortunately, after you fix up the house to sell and pay closing costs, there may not be enough left from the proceeds of sale to pay for a smaller house. Particularly if the smaller house is a brand-new build with all the bells and whistles in a development that may be a step up from the old neighborhood.
If there is a mortgage involved, that makes it worse. If you want to pay cash for the new place but still have a small mortgage on the old, you have to pay off the old mortgage and leave yourself with less cash for the smaller place. If you will need to pay off one mortgage at a lower rate and take out a new one at a much higher rate, the numbers really do not pencil out.
At least in our area.
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Agree that you for sure have take into account closing/entry costs in selling a house/buying a house, as well as the need for upgrades prior to sale, mortgage payoff, and any upgrades to the new house. It’s certainly situation-specific.
But if you do walk away from the old house with enough proceeds to pay cash for a smaller place (depending on where you move, type of new house) I think the math makes sense and is do-able.
When hub and I got married we ‘stretched’ for a largish new house. Then I had baby, left my full-time job for a number of years - $ was tight & stressful!
This time round - want to be pretty sure that if retirement income decreases or we have large expenses - we haven’t over-extended with purchase of home and have some flexibility…
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