According to this Morningstar article,
The financial crisis taught many individuals a harsh lesson about casting their financial lots with a single, illiquid asset: their homes. ... [Although] median household net worth dropped by 35% between 2005 and 2010, according to U.S. Census Bureau data ... home equity still makes up the greatest percentage of net worth in most households, accounting for more than $50,000 of the median household's net worth of $66,740 in 2010. And unlocking that home equity by downsizing is clearly part of the financial plan for many retirees and pre-retirees.
But downsizing may not be right or even necessary for everyone.