Getting a bigger or better home is an emotional decision, but one that can also be fatal to your financial health. It’s exciting to dream about a little extra space or an updated kitchen in a better neighborhood, but then reality sinks in with mortgages, moving costs, and potentially selling low or buying high and you wonder if it truly is the right decision at the right time.
Most people, however, upgrade their homes when they want to without actually being ready. Someone annoys themselves with a cramped kitchen or sees their friend’s brand new beautiful abode and decides at that moment to give up their investment and move. Not that this is wrong, but it’s not necessarily accurate. It’s good to know when you’re ready to move beyond just needing or wanting something nicer.
Your Family Circumstances Have Changed – for Good
This point is important, but it’s also a little nebulous. Everyone knows that if there’s a new baby on the way it’s time to think about space. If you’re suddenly working from home (again) full-time, then perhaps you need room for an office, as well. However, the interesting factor is that this change must also be considered over time.
Many people moved during the pandemic because they decided they needed offices in their homes again – but in 2023 when kids were back at school and adults were back in the office was that extra bedroom still necessary? Maybe they decided to go bigger but were still in the same situation of expansion.
Kids grow and move out. Older parents move in, but not forever. It’s important to consider whether your expanding family needs more space now or if it will need more space in five years. Hence, the distinction between reacting to current family states versus maintaining reactivity down the road.
If you truly need more space and you know you will for a long time, then now is a good time to consider moving. However, if you’re reacting, find out how things settle first.
The Numbers Make Sense
It’s one thing to say I can afford my mortgage payment but it’s another thing to render your finances stable enough that an increase would not cause stress. The best time to move is when numbers make sense; when you have equity built into your home, at least 20% for the next home not to incur PMI costs, and you’ve managed substantial savings beyond a downpayment for moving costs, potential repair needs before actually moving into the new abode and accessible surprise expenses always associated with any real estate purchase.
Additionally, getting your finances in order means your job must be stable enough for you to tolerate a slightly higher payment. Finally, before diving into actual homes, looking at real estate listings is a good way to gauge how realistic your upgrade expectations are. The last thing anyone wants is to settle on an emotional favorite only to realize it’s out of price range.
People tend to overlook maintenance costs as well, the larger the house, especially if it contains a pool or detailed property management needs, will also contribute to higher heating/cooling costs as well as property taxes, which typically come along with larger home expectations.
If Your Existing Home Cannot Be Altered
An alternative to upgrading sometimes is staying where you are and fixing things up. Do you absolutely love your neighborhood? Is the kitchen just outdated, or is there only one bathroom? Sometimes with creativity and money, the best thing you can do for yourself is use what you already have.
But sometimes you cannot easily modify your space if it’s square-footed already maxed out, or if you’ve simply outgrown the neighborhood (i.e. need more room elsewhere or should be closer to work) then moving is necessary.
Also, sometimes the amount you’d want to put into fixing where you already live comes too close to buying what you need elsewhere anyway. So, you have to be honest with yourself about whether renovations are even a possibility. If they’re not and you’ve saved enough to put yourself in a better situation elsewhere then that’s a valid sign it’s time.
You’ve Outgrown Your Neighborhood
The house and its proximity are just as important as the surrounding neighborhood itself. Are there bad schools in your neighborhood? Are you commuting two hours a day and ruining your quality of life? Did the area decline and become less safe?
These questions are more difficult to quantify than square footage but matter just as much for day-to-day convenience satisfaction. If you’re driving half an hour just to get to your favorite coffee shop that’s hard to find in your community, or you’re spending two hours in transit because you’re trying to make suburban living work when you’re truly working adults in the city, then it’s time to find somewhere better fitted for your lifestyle.
On the other hand, if you’re happy where you are aesthetically and with your neighbors, it’s all the more reason to reconsider moving at all. Good neighborhoods with quality neighbors aren’t easy to come by, so don’t discount them.
The Market Timing Works for You
Timing is never perfect – but there are better times than others. If home prices have skyrocketed since you’ve moved in then you’ve likely built up equity, good for selling but also good for assuming your next mortgage will start off with a bang. If interest rates are currently manageable or listings have decent availability in the area you’re aiming for also help.
However, if you’d be selling low and buying high, if you’ve managed to get through a pandemic with prices too high where you live but you’ve found a desirable area that has gotten expensive as well, then numbers don’t add up.
It’s not to say you shouldn’t move in such situations, it just means that emotional decisions also need to be reined in and made practical instead of nice-to-haves.
You’re Emotionally Prepared for the Process
Consistently across surveys moving is one of life’s most stressful situations surpassed only by divorce and death. It’s challenging when your heart is set on packing up roots (and literally) at one point only at another place it becomes cumbersome wondering whether inspections are fully developed or contracts will ever exist.
With all other life’s burdens sometimes inviting moving isn’t advantageous, new jobs create stress; health issues create stress; family dynamics create stress. Unless you’re certain you’ve stabilized as much as possible emotionally and in life, and have emotional bandwidth left over just for the process, then now may not be the best time.
Making the Final Decision
The idea behind whether there is ever a right time to upgrade means that nothing will probably ever feel perfect. Whether it’s now or years later you’ll probably second-guess yourself.
However, if you’re positioning yourself through valid criteria, family dynamics/decisions changed; financial/practical awareness/readiness; emotional stability leading up until selling/buying, but had been putting off looking elsewhere than generally speaking, you’ve set yourself up successfully.
It’s all about being honest with yourself regarding what’s nice and what’s necessary, and wants versus readiness. Once those two become aligned you can dive into what’s next.
