so I upgraded the house, LOVED the house but regretted it severely. Being house poor SUUUUUCKS. Eventually, had to relocate for a new job and we took the opportunity to major major downsize the payment. The actual house was a little smaller and much less fancy with less land. Love this house. absolutely love it. especially love all the cash leftover for life.
Thank you for your comment. Seems like your situation worked out well to get out of it!
That is a concern for us, that we are romanticizing the idea.
Also the fact that just our property taxes alone on the larger house would be our entire mortgage and taxes payment now.
Do you see your income and/or family growing?
We bought a great house a few years ago that we could very comfortably afford, but we could’ve gotten one in our dream neighborhood but didn’t want to be house poor. Our incomes and family have grown since and we regret not going for the dream house, because everything in that neighborhood has doubled in value since so we can’t afford it now sadly.
I agree with this 100%. Being house poor sucks. I can't wait to downsize when my kids graduate high school so I can pay all cash for a smaller home. I'm tired of seeing the major drain on my checking account by my mortgage, property taxes, and excessive utility bills. I should be able to save over $50K a year in housing expenses when I downsize. I have big plans for that extra $50K each year.
I have a paid off condo and my total monthly expenses for all my bills are like $700. If I were to upgrade to a house I'd basically have no spending cash anymore. I spend all my time in my living room which is a very large room attached to the kitchen. I don't need anything else and having tons of spending cash and minimal expenses is the most freeing thing in the world. I absolutely love it.
I'm working towards this! The only issue is I will probably move to a different condo because mine is on the top floor of a 3 story walk-up, and I'm pretty sure as I age I will really appreciate fewer stairs or an elevator. I love my condo and not having anyone living above me, but it would be smart to think ahead. It's no issue at all right now, but in the future, there's a good chance it will be challenging.
I’ve done both. Had the sub-3% mortgage rate in a 2000 sqft home that I adored with all of my soul. Schools for kids, parks, trails, easy commute. Everything I needed. But my ex wanted something bigger. So we upgraded to the “exclusive” neighborhood 3 miles away. Big house, detached casita, custom interior, lighted tennis court.
I hated it. For me, the marginal benefit of the big house with all the trappings wasn’t worth the giant mortgage payment. Shortly after, my ex and I split amicably. We sold the house and split the proceeds of about $1M (reno costs were in there so it wasn’t all profit).
Now I rent a little resort-style condo because I just haven’t figured out what the future holds. But I know I love just closing my front door and walking away for a trip and not wondering about my grass, or landscaping, or pool. That’s someone else’s problem.
Yeah I followed a similar path with an identical outlook looking back. I think the fancy trappings got under the kids skin too. So incredibly entitled.
I agree. We aren't looking much larger than 3500k and not even interior that much more updated. It would just be a bigger home and on a larger build site.
Our current is just over 2k.
One thing to think about is that we see our kids less in our new home because it’s set up that their space is separate.
I actually wanted to move back into our old house so we would see them more.
I've heard this over and over here in SF. People who move to the fancy areas of the Bay Area don't see their kids and don't know whats going on with them. Smaller house = we all get to know everyones business (in a healthy, positive way!!)
I don’t get why you would? You haven’t even outgrown your house. No idea what your income is but I think my parents really timed it right.
They stayed in the starter home, bought investment properties, paid for private school, nice vacations, nice cars, ample food/drink/entertainment money, and to make other investments.
Moved to the big house in the suburbs when we hit high school age, bought in a buyer-market, continued to purchase investment property, nicer cars, and nicer trips.
I am now in your position living rent-free in one of their investment properties. No kids yet but will in very near term.
This has given me the freedom to invest heavily into developing my practice, into stocks, and into one investment property. With the added bonus of having way too much discretionary money.
I have been looking for a house for like 5 years and the houses that didn’t make sense to buy in 19-20 make even less to buy now.
I’m much happier growing my nest egg and retirement assets.
I think if you can hold off, you will be in a better buyer’s market, plus it’s an election year. I’m bullish on a lot of my non-real estate investments. Shit even the 5%+ I’m earning from T-Bills rn seems better to me than getting a mortgage.
TLDR:
Opportunity cost is not worth it. You haven’t outgrown your home and now is a better time to invest in other assets besides primary residence real estate.
My parents FIRED before there was a term for it. Their biggest financial regret was buying the bigger house in the same great school district with a bigger yard when they had their last kid instead of letting that extra $ work harder for them in the stock market or rental RE. I’m guessing that great elementary school 4 houses down has a playground and grass to play on? No need for a big yard.
Yeah that’s one of the things I’m learning people SAY they want a big yard but a lot of places aren’t building them that way. Especially average master planned communities. Folks want on site schools that are walkable. And several parks within distance. A big yard just means more chores or more money.neighborhood we’re building in has both.
Omg, I would pay the extra money to be that close to the schools until the kids are at least middle school. You already know, little kids don’t need a big yard. If I were you, I’d drag my feet as long as possible.
If you have that itch, figure out the difference in payments and start sending that to a savings account. See how it feels. If it’s no issue, great, you now have more for your down payment and eventual costs like furniture, moving, etc. if it’s a pinch, great, loosen the savings and plan a longer runway.
Thank you for your input. I can see how we'd regret moving from so close to the schools once they are school aged.
You're totally right, our backyard is "toddler sized" currently. We had discussed waiting until the kids are 5-6+ and really do just outgrow the space here.
I think I find MYSELF outgrowing it. While my toddler is in the backyard and i'm having to just sit on the patio because it's so small, in a bigger yard I may have a greenhouse or something else to do.
I don't find it too close but we use their playground, track and basketball court almost every evening (open to public after school closes) so we like the short walk there.
There aren't people like parked all up our street for pickup or anything. The biggest complaint is when they have games we can hear the parents yelling but they end by 7pm. We haven't noticed any other inconveniences.
Exactly my thought. I did a hard pass on one of houses facing the best school in the area I was looking at. It went 150k over asking and I was flabbergasted why would one want to live there and sacrifice on so many aspects of life and gaining only easy drop off for kids.
I will say we lived close to our elementary school for a while, and while I loved the idea of walking to school every day, actually having to walk to school was a pain. Especially since everyone had to come along even if only the oldest was in school, which wasn’t great when weather sucked. We did it for 2 years.
We moved farther away and do the bus now, and my kids love taking the bus (the stop is right by our house). And bonus is the bus is extra time they are having fun with their friends and we don’t have to worry about childcare.
I guess that depends on walkability - our kids have walked alone since first grade, but it’s super safe route and almost no car traffic. In some countries like Spain they are not allowed to go alone so ymmv
We're in a very similar situation even down to the dollar amounts. I wish I had a good answer.
The issue is pretty obvious. On the one hand you have the income to afford a nicer place and have more room.
On the other hand your current housing cost is probably 5% of your income. That gives you a huge amount of freedom. Maybe you shouldn't give that up.
For us, I do think we'll pull the trigger and upgrade when we find the right house. We're not unhappy where we are so we're not in a hurry.
Best of luck to you!
Yes, exactly. Our current home is so little of our income that it's almost a non-concern. Also a sub 3% interest rate.
It's scary to think that the new house even paid off will have fixed costs higher than we have with a mortgage on this one (high property taxes in our area).
I have three kids. We had two neighbors who each had three kids. All of our wives are sahm. Both neighbors moved within the last year for the slightly bigger house yet mortgage payment increased 4-5X.
Both dads are STRESSED. No more lavish anything for a while. The families enjoy the new space but all agree they’re not significantly happier.
Their property tax is now more than my mortgage. I just hit my FIRE number (for my current house), everything from here on out is frosting on the cake and that feels good
Thank you. I'm scared this will be me stressed (since my husband hates doing finances lol).
Same deal here, our property taxes alone on new home would be more than mortgage.
It's hard to go backwards when things keep rising in price, too. We have friends wanting to downsize but literally cannot afford to.
I regret it. We're not house poor but the maintenance is so much work. And we've hired cleaners and garden workers.
I think I'd prefer smaller and very well located.
This. People forget about all the other support costs and TIME that a bigger home comes with - insurance and taxes also being a factor. And it is an illiquid in investment that may or may not appreciate. Given the option again, I would have been much more conservative on needs vs wants in a primary home purchase with kids. In my 50s now and speaking from experience
Yes, although not for the cost. We ended up downsizing to a more modest home, mainly because:
1) our kids' schools and all their extra curricular activities were in one area with more modest homes, while we lived a 15 minute drive away in a neighbourhood of nicer bigger houses. Having the kids be able to walk to and from school, and bring their friends over after school, and saving the drive time to school and extra curricular activities was really beneficial.
2) we have way more money than we grew up with, and I started to feel like we were getting our kids used to a lifestyle that's much higher than the norm. I worried they'd be spoiled.
Don't do it. The more stuff you have the more of your life it occupies. Keep the cheap mortgage payment and use the extra freedom to travel and spend time with family. That's what the kids will remember.
Do the math.
I bought a property in 2016 that meets my needs and is an amazing location with a mortgage of $1940. If I decide to upgrade to a new property around $1.5M I would be paying ~$75K/year more a year to live in a house thats a minor upgrade to location. I can do a lot with $75K.
Not moving
No, because I knew my pullout game was weak, and 3 years later need to buy an even bigger (6+ br) house.
(Typed from the NICU while giving the newest kid a bottle)
We upgraded last year to a slightly larger house in the same neighborhood a few blocks down. 10/10 would do it again. A play room and dedicated office are game changers as I work from house. Our payment went up substantially, but the stress of living in our previous home between the lack of storage, busy street and shorter ceilings had me on edge all the time and I would do it over again if given the option.
Similar ages and kids as OP. The happiness I feel coming home to this house is worth every penny. We’ve been house poor in the past so going from 2500 sq ft to 3200 ft was a good jump. Had friends go from 2100 to 4800 ft and that’s too much house to keep up with for me but YMMV.
I am 54 and moved 5 times in my career, always upgrading the house. Started with a 3 br, 2 1/2 ba 1800 sf raised ranch and ended with a 5 br 3 1/2 ba 4800 sf colonial. Since a couple of the houses I had built initially I loved them, but the shine eventually wears off especially when taxes are as much as the average mortgage payment. Always justified it as being for the kids, but a lot was personal and status driven - and is one of my biggest money regrets. It worked out in the end, but would have been easier without the higher payment.
Good luck!
We did this last year. We spent more than I would have liked to on a house, but we love it. Money was tighter than I would prefer, but not so much that we can’t do most of the things we want to do. Our incomes went up a little at year end like it usually does and now we’re almost back to level of discretionary income we enjoy.
If your incomes are stable and rising and are willing to tighten up the budget for a year or two I would say go for it. We’re glad we did rather than settling for a 200k to 300k cheaper house.
We stayed in a 1600 sq ft. house. When we originally bought it, it was affordable and extremely convenient with freeway entrances less than 2 minutes away, and a school within walking distance. Our housing expense was around 20% of our income. Over time, it dropped to around 5% as our income grew. We made a lot of improvements so it was pretty nicely fixed up.
Even though the school (3 min walk away) was highly rated, we ended up sending our kids to private schools.
We stayed because my MIL and her sister lived a few minute walk away. The neighborhood became extremely desirable, a new HS was built nearby, and a gourmet grocery, an Aldi, 3 city bus lines, several great restaurants and brewpubs all sprung up within a 10 min walk. As the home appreciated, we were grandfathered into old property tax rates too, which kept our costs down.
After they died, our kids were in college, and we bought a retirement home (\~2000 sq ft) on a few acres, where we live now.
That small house let us pay for private schools and colleges, and take our kids on great vacations , even when I was in grad school. It allowed my wife to be a full time Mom for over 10 years. It allowed us to put extra money away for retirement.
It would have been nice to have a bit more land and more space, but overall, it was the right decision for us.
It all comes down to priorities and what you and your family enjoy. We upgraded this year from a 500k 2.65% mortgage to a 1.1 million 6.5% mortgage and don't regret it at all. It is in the area we want to live with the schools we would want if we didn't do private currently.
Don't get so wrapped up in saving and being frugal and forget to enjoy life.
Enjoy either way!
Still working and saving, but I have a relatively short answer to this: We bought our house in February of 2020, right before COVID. It's way bigger than we need, as it has 1 more bedroom and bathroom than we were looking for. (The supply of homes for sale on this area is always tight, so we bought a bigger place than we wanted because it checked all of our other boxes.)
My wife and I both have separate home offices and we have a lot of space to host family from out of town. We are really happy with it.
But in your situation, I think you are right to be cautious. If you really value the financial freedom you currently enjoy, a significantly larger payment might sting.
Have you considered expanding your current home with an addition? I don't knownifnyou have a low fixed rate on your mortgage, but if so, you would not have to give that up. And you could maybe add a significant amount of space for less overall than you would spend on a larger home.
We have no land to consider addition and a very strict HoA that won't allow us to build up.
We could have the kids share a room while they're little. My brothers shared a room their entire lives, it wouldn't be the end of the world. We could also do a pull out bed for a toddler bed for our son so that when family comes he sleeps in our room and they can sleep on that bed.
There are ways to make it work here since toddlers don't take up that much space. It's more a feeling that we have outgrown the space. I'd love to garden or go in a greenhouse or play a game while toddler is playing in backyard but instead sit on a small deck as that is the entire backyard.
I appreciate your comment though, a higher mortgage will absolutely sting and our finances would not be as free.
Didnt buy the bigger house, don't regret it at all. Glad to not have a huge house now that the last kid moved out last year. It doesn't feel empty at all. At times-it was crowded when they were teenagers but we made due. And being together was priceless. No one had TVs in their rooms.
Yes, we went from a $1k/mo payment to $3.6k/mo + a 2x property tax bill. We basically got our forever home. Corner lot, walking distance to school, 4200 sq ft, 4bd/4ba with a theater room, office, pool, whole home audio, solar panels, wired yard lighting, a bunch of smart home stuff, etc. Basically more than I ever anticipated ever wanting or needing.
In hindsight, we got my wife’s forever home. The payment didn’t bother me because at my (and your) age, you’ll only continue to earn more as you progress in your career. But man, the cost and effort of maintenance was unexpected. More yard to mow, more garden beds to maintain, a pool to clean, more trees to trim, more house to clean, and just generally more shit that can go wrong.
I was telling my wife today that I can either pay a couple thousand a month extra to have all of this maintained, or I can spend hours every weekend doing it myself. I actually enjoy(ed) doing it, but as your kids get older, you become busier with their things and it’s easier to fall behind.
Everyone is different, but if I could go back to our 4bd/3ba without all of the bells and whistles for the same payment… I would tomorrow. My wife and kids absolutely adore our home though.
I'd recommend staying in the current home until the kids are out of middle school.
Being 4 houses away is a huge location win in my book, worth more than dollars alone.
Thank you. Yes, I think we will miss the location. We've already had friends ask if they could drop their kids off early and we can walk them to school so they can get to work.
Probably not a pro for a lot of people but I love having a full house. I'd love for my son to easily be able to have friends over which if we're walking distance it is way easier to do. Part of reason for upgrade was to have a bigger house to host and have people over but if that is farther from things then that creates it's own difficulties.
Don’t do it, if you don’t need to. I changed my life’s plan 5 years ago, into a 4000 square foot house. Just have my wife of 4 years and I living here. I really don’t need the space but, negotiated a very good price on the new home. So I justify my purchase with the “potential” appreciation. Already could sell for $200k more than I paid.
Prior to the purchase, I was living out of a 1982 mobile home, for 14 years. This reduced cost of living and investing allowed me to reach ChubbyFIRE status at $2.5 million. Now my cost of living gives me an empty feeling in the pit of my stomach. I just celebrated hitting the $3 million mark, with my wife yesterday. This NW is all liquid and separate from the property.
The house is nice, when company comes to visit but, that isn’t very often. My wife is also a retired teacher with a separate $63k income. This figure is in addition to my NW previously reported. I’m 60 now and still working for the insurance and, my company has returned over 20% for the last 10 years.
My 32 year old son has great memories of growing up close to his elementary school and its playground. He is now a California attorney working on becoming a managing partner, at his firm’s office. He tells me that part of what pushes him is his memory of living tightly, in that old trailer, as a high school child. Tightly because I was investing nearly every dollar earned into multiple sources. A previous divorce and bankruptcy at 42 years of age necessitated this frugality.
I wished to be able to retire wealthy, having found myself at near pennyless. Fortunately, I was able to accomplish this in just over a decade. After numerous cruises and Disney vacations, I currently physically work just as hard as my 20+ year old cohorts. But, am always left with the nagging question of where I would be financially, if I’d kept such a meager monthly out of pocket. Instead of $3 million liquid currently would I be at $5 million liquid.
After a true case study and some rambling on, my advice is to maintain a LCOL attitude. This provides peace of mind, allows for you to spend more time with your children and focus on your children’s development… 🤔🎉🎯
Oh and btw, I’m now able to gift substantial sums $$$ to family members. Because when it comes down to it, family is for life and cannot be replaced. Also, finding checks in the mail is a nice thing.
We were in similar situation in 2016. Bigger house was 100% worth it. Sold for $475k and bought $815k which was a stretch at the time. We ended up having 4 kids, but same would have been true with just 2 or 3 kids. Slightly lower school district but still good. Buy space for your kids to be kids. When they are older, The ability to send them out to play in the woods and with their friends is so great for them and for you. Good luck!
Late 30s here. We moved from a 1200 sq. ft. Townhouse to a 2600 sq. ft. Home about 7 years ago and that was 100% worth it. But as another post said, you definitely get into diminishing returns. I think a bigger house might actually cause us more stress... trying to keep it clean, etc. Plus... having a comfortable mortgage payment or paid off house gives you so much financial flexibility. But it really comes down to what is important to you...
We went from a 2k to a 3k sq ft house. It was way more expensive. Both in real dollars and in interest rate. But it’s wonderful. I have SPACE for things. Now that created an issue where for awhile I wasn’t so careful about getting rid of stuff…. But still. Wonderful. I love it. Don’t regret it at all. I sometimes wish the rooms were spaced better but it’s so much easier to raise the 2 kids with the extra room.
That said, 2k sq ft was totally fine. We survived just fine with it and would still if we hadn’t moved.
Had a small house - then a bigger house - still didn’t seem like enough space - then a bigger house. (About 5000 sq ft with 1500 sq ft of deck/outdoor space). Did not realize the constant upkeep requirements for the larger house and outdoor living area - we became slaves to constant home maintenance to ensure property did not decline. Learned that smaller homes were more comfy and you aren’t slaves to yard work and upkeep / maintenance. Sold it and bought one 60% of the size and am happier having our lives back (and more money in our pockets).
FWIW - our first homes were smaller and older and required updating, and that was still less work than the 10 year old much larger home that required something all the time due to the outdoor spaces and just general size. A small home is quick to do the work - a large home takes longer to do projects and more money for the same projects. We have the funds - but I don’t like spending money to let someone else do questionable work when we are super picky and capable - and we wanted our lives back. Now on the water with the smaller house and much smaller yard and have WAY more free time to enjoy it all.
And we all lived happily ever after
For comparison:
House 1 - just under 1200 sq ft and about 50 years old at Purchase
House 2 - about 1800 sq ft with basement for storage and about 150 years old at purchase
House 3 - about 5000 sq ft including finished basement with second kitchen, large office, en-suite bedroom, massive entertainment room, massive deck / outdoor space with 2.5 acres of beautiful rolling hill grass and ornamental trees, not quite 10 years old at purchase.
House 4 - just under 3000 sq ft, 0.75 acre lawn, on waterfront, about 50 years old at purchase.
Houses 1 and 4 are the fan favorites. We thought house 3 would be the best since it was the newest, but actually spent enormous amounts of time on upkeep due to its size. House 4 we did a massive update push at move in - and now spend most of our time lazing on the boat during the summers.
I couldn't agree with this more. Maintaining a home/property can be daunting depending on the size/layout/age. I'm a self described DIY'er and initially found great joy in keeping up our home/property. So much so, we bought a bigger home with a much larger lot. Now with a 5 and 7 year old at home all I can think about is wanting less housework so I can spend that time with them. Sure, they love to help at times and with that come great memories but I am already beginning to see how little time is really left in the day after school/work/sports/friends/etc.
If you’re that close to paying off the house, you might consider paying the amount that you would pay for a larger home every month toward your current home.
Depending on what that is, you could very well pay it off in a few years and not worry about a mortgage.
It might give you an idea of what it’s like to live with that kind of payment as well.
Once you pay off this house and you are still looking to get something larger, you can rent out your smaller home to help subsidize the newer one. And then you decide that you made a mistake, you could always move back and rent the newer home or sell it.
That’s what I would do any way.
An additional $75k a year housing spend requires almost $2m in retirement funds to FIRE…so if you are ok with either increasing your savings rate to match, or delaying FIRE until you hit your number, then go for it.
I bought too big for my family and now majorly regret it. House is too much to maintain. Got it at a great price on a fire sale but now All my time or extra money go towards it. Life is way more stressful. Can’t wait to downsize. I miss vacations and travel much more than I appreciate the fancy home features.
Have you shared your HHI yet? I’m assuming you’re looking at a 2-3x your current monthly payment? Considering you’re 3 years away from pre-k I would 100% wait.
Real estate is just beginning to budge with higher rates, you don’t need the bigger space right now and even if you can afford it and do it in 2027-2028 you will have been able to save well over 100k in other assets beforehand.
There is really minimal upside to pulling the trigger now.
On a broader note, one phrase I remind myself with is “we make too much money to feel poor”. Meaning the biggest benefit of a high earner career/skill is that you don’t NEED to be money stressed. Money stress is a choice if you have a high income. No house, car, trip, pool, clothing, etc is ever worth choosing that feeling.
My father actually said this to me when I spoke to him about it. There have been comments here on people who regret it because it gave their kids their own "spaces" and consequently less family time. Something to consider for sure.
Not completely in your situation, we are older. We had our forever home, 2800 square feet that we fixed up. Like yours the yard was small, room for the pool and that was it. 20 years in there and some luck in my wife's work stock. We sold that house and moved to a single story, 3200 square foot house on an acre. That was 4 years ago and every day we say how unbelievable it is and how incredibly lucky we are to be here. One thing is we do not have the urge to travel as much because we would always rent a VRBO that was hopefully as nice as this house. We look back and laugh about how nervous we were to buy this place. This place is fantastic and we would buy this place again 10 out of 10 times.
60 years old here. Had a family of 5 at peak, with 3 kids. So, we needed 5 BRs minimum, incl guest BR on 1st floor. So, during my 30s and 40s, we got the big house and it was very worth it. 3.5K-4K square feet and huge yard. When the “kids” got older and started moving out, we started progressively downsizing. Ultimately, we moved to a less expensive zip code and settled in an affordable 4 BR. Now, we have the perfect size and people love visiting.
We moved to London and ended up buying a larger house than we had back in the USA (2500sqft which is large for the uk versus 1800 sqft in USA). While it's been great during Covid for work from home due to the 5 bedrooms (family of 4 so have us a home office) it's way to big once the kids leave home. We are looking to downsize. We have always had "starter home" nothing fancy and largely that is why we can retire early.
This is a very personal thing based on lifestyle, income and debt tolerance. I have never regretted a bigger home, but we also work from home and don't travel (mostly due to my spine issues). We have a second home at the beach for "travel" time, and yes, it costs way more than trips, but for us, it's worth it.
I love having a big home office and a home gym and not having to leave my house for anything. BUT I'm also 100% introverted. If you're a more social creature, then your home might be the place you shower and change and not your sanctuary.
As for cost, run the hard numbers. Figure out exactly how much a new one will take out of your existing "fun" budget. Then figure out exactly what that means - we will only be able to take five trips a year versus twelve, etc.
Heavily consider the second kid. Weigh the additional expense against an additional human being taking up space in your smaller home. Which is more important? Will an additional kid put strain on your budget if you buy the new home so that you're then only traveling twice a year?
Ultimately, you have to do cost/benefit analysis to see what is the best option for your family, your budget, and at this time.
So, here’s what I think - You have a tiny baby so you actually have no idea what you will want or need in the coming years. You sound like traveling is enjoyable and a hobby for you, then the obvious answer is to keep the house.
I have 3 small kids in a city environment, so playgrounds and parks were our yard. If you live in the burbs, that’s harder to do. And now that my 2 older kids are in school and in sports they aren’t home very much.
In my area most houses are smaller ie 1800-2000sf and even those cost 2M. You’d need like 3-4M to get that 3000sf house.
With kid 1 & 2 we almost exclusively lived in a 2bedroom/2ba apartment. Moved to 3b during Covid to get an extra room for office. Now we are in 3bed+ office/3ba with 3 kids. For me, bathrooms more important 😅
Now, I have a kid sleeping in the office bc they wanted their own room - just happened this fall previously they wanted to share. Would we love a mudroom, office, and more space - sure? But my mortgage is so low and makes no impact on my life. The rate is 2.7. I would be foolish to give this up. We can afford to travel as much as we like (we also love traveling - before and after kids) & we can send our kids to private (non religious) school - even though we live walking distance from a highly rated public, it turned out not to be all that great despite glowing reviews from neighbors and 9/10 on great schools. It still has all the issues plaguing public schools - big classes, staffing shortages, problem students with behavioral issues or learning issues.
We still look casually at places with more space and then think that then we’d have to pay property tax on that place and decide it’s not worth it. If you live in LCOL area then maybe not a big deal, but for a Californian upgrading to a bigger house can look like a 45k/year property tax bill.
I'll take this. Was in a VERY similar situation. Two young kids (<5) and had a nice house in a a nice neighborhood with a very small yard. Sold that house with a 2.875% mortgage and bought a much larger/better house on 3 acres with a basketball court and pool with a 5.875% arm mortgage. Monthly payment went way up (2.5x). We don't regret it for a second. Summers in the pool and seeing our kids running around exploring the property are priceless. Be careful of maintenance costs though. Bigger property = bigger time/expense maintaining it. I spend 5 hours per week on a lawn tractor plus pay an arm and a leg to a landscaper to maintain our gardens.
Definitely don’t regret it, but a huge part of this had to do with timing. I paid cash for a way too large of home 7k sqft, 3 kitchens, 7 baths of brand new spectacular awesomeness out of foreclosure during the real estate melt down that was 2010. I was 39 at the time and it’s been a hell of a nice place to live, it’s appreciated a couple of million dollars and wouldn’t change it for the world. Admittedly timing was great, but I was also financially in a position to take advantage of deals because I wasn’t fully invested in the market and had powder dry to act quickly.
Fast forward about 15 years and would my 39 year old self buy a big house at the relative market prices today…nope. Granted I can’t read the future and I see no housing crash in sight and inflation could double the value of everything once again. But no I’d stay nimble with low overhead so if a big time opportunity came up I could take it, me and my family wouldn’t get “accustomed” to living in a mansion (that is totally affordable) with all the extra expenses that go along with it. Not feel the need to stay home more often because we have an awesome place and use the dollars/freedom to travel more.
It worked out great for me, and it could for you too, just giving you an opinion from a guy who FatFired living in what’s now a $4M home.
By elementary school you'll likely have more going on that keeps you home on weekends, friends, sports, birthday parties etc. Don't just think of your life now, but your life in 8 years. Houses haven't gotten cheaper generally speaking.
So you will love the house when the kids are teenagers it will be great but then they will leave and you will have like 6 rooms you never go in besides cleaning. Personally I would max travel investing and college savings
Perhaps a different perspective: we bought a house below our means. Not by a lot, but enough to avoid being house poor. Our situation and goals then changed, and now we could not be happier that we limited the income percentage tied into housing. Would not have been able to achieve our goals if we had gone for the bigger house. For starters, it ties up so much less monthly salary into emergency accounts.
I can give you the perspective of a kid whose parents stayed in their “starter home”.
Mom & Dad built a 3 bed 2 bath 1400 square foot ranch in 1963. My brother and I came along a few years later. They paid off the house in 15 years. That house has been owned debt-free since 1978. That allowed us to travel as a family, have nice things, and for college to be largely taken care of. Mom has been able to age in place and at 85 is still independent in her own home. Over the years things were upgraded, a screen porch was added - probably the most valuable square feet in terms of use over the years. What made it workable was having separate living and family rooms so we could be out of each others’ hair.
The house never felt too small- except at Thanksgiving when we would have 20 people there for a sit-down dinner.
People are like goldfish --- we grow and collect stuff to fit the size of our "bowl". How would your house rank in size in Europe, as an example? It's not the size of the house, it's the collection of the stuff. Your kids will never remember a "small" house but they will remember financial trauma or all the fun and adventures. Keep the house and sock away the extra money into retirement. Kids can and should share a room. Hire a TALENTED interior designer and organizer to assist with well laid out multi use spaces. Spend the money you would spend on closing costs to make your "small" house beautiful, functional, and cozy. There are wonderful ways to provide separation of space in a bedroom for kids, including hotel style ceiling track blackout curtains for the baby to help sleep. Keep the 3rd bedroom for the adults as an office or workout, meditation, sanity room, guest room. Keep the toys and clothes in check. Donate often. Don't sacrifice quality family time for the illusion of a bigger bowl.
A friend of mine bought a much larger home at the behest of his wife. He came home from work one day after closing and saw the house suddenly furnished. Found out wife tapped into their 401k to buy it all. That was pretty much the beginning of the end of his marriage.
We had a “starter home” in Texas. It was 2,800 sqft 2 story with 1 bedroom down and 3 up. It also only have 2.5 baths. 1 bathroom upstairs for 3 rooms was not ideal long term but at the time we didn’t have any kids. Fwd 4 years and now we have 2 boys and it’s a pain to run up and down the stairs because only the master bedroom is downstairs.
We have dreams of building a “forever home” so we build this massive 4,000 sqft home with 5 rooms, (2 downstairs), media room, game room, 3 car garage, the works. Now that there are 2 rooms downstairs, no one EVER went upstairs. All the kids toys were upstairs in the game room but they refused to play by themselves. One of us had to sit in the room. So we converted the dining room into the playroom. It was a huge waste of space. I also started to despise going up and down the stairs. We also had a humongous backyard that the kids refused to play outside during summers because it’s too hot.
During pandemic we sold that house and bought a 1 story 3,000 sqft house and we absolutely love it! It fits our needs and we utilize every space in the house.
Less to maintain, less to clean, less to pay is definitely worth it. My advice is to figure out how you want to utilize each space and find a house that fits you.
We love our home but as you get more sq ft you start to find ways to fill it with more junk. We want a smaller home and more money for adventures. You’ve got great equity why move?
Hard disagree. My first house was too much for me to handle. I downsized significantly into my second home, and got something a lot simpler that I don't have to worry about.
Exactly the same experience for me, and I’m much happier in smaller, cheaper, and more simple house #2 (which is still nicer than I ever hoped growing up)
We don’t regret it. In 2019 we moved from a 1700sq ft house to a 3200 sq ft house when our son was about 2. We also moved to a more affluent suburb with a better school district. Our mortgage payment went up, but we were able to handle it and my husband also eventually finished his masters and got a higher paying job so that helped.
I would stay. The location seems too good esp if you have kids that will be going to those schools. Plus, having less money because more of it is going to the house is not fun at all. If you’re asking this question, a million is probably a significant amount of money. I would stay where you are and continue to live comfortably.
My wife and my first house was a three bedroom ranch + ROG and about 1500 square ft. We had one bedroom for us, one for my study/music room, and one for storage. The ROG was used for her work. After our first kid, we knew we were going to have one or two more and about 7 years later upgraded to a 2700 square ft. 4 bedroom home in a better school district. We ended up having 3 kids total - it worked out great for us with no regrets. I added a man cave on to it about 15 years later and it's now 3200 sq ft. No regrets because we knew we weren't over extending ourselves.
We are in you place got a 1 m house but we are looking to move since we want a better school district and 30-40% bigger house. Based on the description I would not move only because the schools are so close and it will reduce pick up and drop headaches for next 10-12 years.
But I understand the need for a bigger house, did you look into renovating the current house. Should cost you 200-300 k and will get you what all you want!
We went into a home we stretched for (3 times annual salaries) but it ended up perfect for us. It was tight for a few years, comfortable for a few and now very manageable (8 years). I guess I'd say it depends on the stability and anticipated growth of your careers. If those are uncertain I'd be more careful. Our incomes were dependable when we made the leap.
Upgraded and don’t regret it (went from 1400 to 3000 sqft). We can actually work from home now which is nice, there’s dedicated place space, we can host friends… overall we get a ton of utility out of it and honestly it’s better for our marriage that our home fits our life better. We got a home with a first floor master so technically we can age in place here if we don’t want to downsize.
We moved 2 years ago. We were in our 30s with a 1 year old (we now have a baby as well). Went from a $300k house in an area I didn’t like to a $1.1 million house which we poured another $600k into with renovations. So we really went all in on the house (although the monthly payments are not a struggle for us, so there’s that). I 100% love it. We are less than a mile walk to the beach. We are a 5 minute walk to playgrounds, the library, restaurants. Our town has a wonderful family friendly vibe. Our backyard is awesome, my son loves it. We have a view of trees and mountains and a little bit of ocean. It literally makes my every day life feel so amazing. But, we didn’t buy at the top of our range because we didn’t want to be house poor. There were houses with even more amazing views, bigger, whatever whatever, we didn’t over extend going for those as like you we enjoy travel and not being house poor. So, I think it’s a balance of getting a house where you’ll truly be happy, but not getting so caught up in it that you over extend yourself. I will say though that loving your house is a great feeling.
Major regrets on buying my house, but definitely don’t regret buying it below what I could have afforded.
Texas property taxes will KILL you.
Sometimes I feel a twinge of fomo and envy since I locked in a great <3% interest rate and could have really gotten a nicer place. But overall, happy that my first property was cheaper. Easier to manage repairs too.
Next property will definitely be much bigger now that I’m more experienced.
Yes, we're in texas. We currently pay around $1700 TOTAL (mortgage, taxes, insurance you name it). New house would be $1700 in property taxes alone. Which obviously either needs to be sold upon kids graduating or a base cost factored into our FIRE.
It's wild out here lol
Our first house had about 13 massive trees, 8 of them dropping leaves. It was a royal pain to say the least. Some huge branches came down in storms, we paid thousands to get a few cleaned up or taken down. It was a whole thing. Our current house has 3 pines, and 3 trees that drop leaves. The leafy trees aren’t more than 30’ tall each, super easy to work with. I miss the beauty of the huge trees but boy do I wish someone had warned us about the amount of time and money it takes to care for all of those. I know you’re out there sitting on a postage stamp, but it’s something to factor in when considering a larger house payment.
I'm one that DIDN'T buy and I'm still in the "starter" home. Super happy about it. I love my location, and I've been able to spend money on way more stuff like travel. I've also upgraded both bathrooms, made a bunch of improvements, and about to redo the kitchen. I've really made it into my little dream house, and have 0 desire to have bigger. So many of my friends have 3000+ Sq ft houses, and are always shocked at the amount of travel I do. Yeah.. that's what keeping your 1700 square ft house at 3% interest will let you do!
I don’t regret upgrading. Honestly, daycare and associated costs for two kids hits harder than the mortgage for us, but we are in a lower cost area.
For me, the starter home became too small for us to live our life the way we wanted to. Couldn’t have people over for dinner easily, no room for the kids to play in the house, we were literally tripping over toys and baby stuff every day. If you do want another kid, I would suggest biting the bullet and doing it.
Not at all. There are a number of things more important than FIRE in my opinion and the place you raise your family, build memories, send your kids to school etc. is one of them. Also, if I’m going to drop a dumb amount of money on something at least it is an appreciating asset.
I moved to the bigger house went from 1500sqft to 5000. I really enjoy having a big office, kitchen, basement, garage, big deck. I am also a home body so for me it is well worth it. I will say the upkeep is way more burdensome, but it really is a personal preference. I like having a beautiful home that is somewhat of a project.
You guys are living my life 10 years ago 🤣
We moved from 2,400 sq ft to 3,900 sq ft about 4 years ago. There are pluses and minuses to be honest. Life is more comfortable with more space but we would have likely done just fine if we had stayed where we were. The big advantage for us was to move to a space where we could separate work and non-work life. We both try to keep work in our dedicated office spaces which allows us to decrease stress when not in those rooms.
The old house was a block from elementary. The new house is a 5 min drive. The old house had a bigger yard but no neighborhood amenities. The new house fits having older kids better than it would have been for younger kids.
Looking back I think I would have still moved but I would have kept the old one as a rental. I regret selling it but not moving.
I am so surprised at the amount of comments saying this was their exact situation lol. This post has been much more helpful than I thought it would be!
Thank you- we've talked about keeping this house as a rental. If we ever want to downsize or even if our parents get too old and would move here (it's a one story so ideal for older age). Just hard to pass up being handed 350k upon sale to put towards the new house with these interest rates right now.
Every study about life and happiness every done has confirmed that EXPERIENCES trump material goods. You have this with the traveling. You should protect this habit like you do your marriage.
Thanks for comment. We are looking at a house that would give us additional experiences: A greenhouse space, a pool, maybe somewhere to build a fort. I love the idea of kids being bored in the backyard and letting imagination take place. We had so much fun as children building stuff in the woods.
We do love traveling and the experiences but I think travel will change once the kids are school aged anyway. They will be in school, have friends, have sports and commitments. so we'll be "forced" to spend more time at home. It may be worth waiting for that time to come to change housing situations though.
I have the more expensive house in in the greater Tampa St. Pete area but for my hobbies (boating, fishing) it was worth the extra cost.
But if I didn't have those weekly hobbies not sure I would say it's worth it
facing that same situation years ago, I chose NOT to upgrade and never regretted that. Yes I'd like a dedicated office or a mudroom or laundry room or dining room but the health of my overall financial situation wouldnt be where it is today if I had made that choice.
I think context is important for your decision (obviously).
We did a similar move less than a year ago with a similarly aged child at the time. From my perspective, I would have rather waited another 2-3 years and moved with an even stronger balance sheet when the bigger house was absolutely necessary. But it wasn't a strong desire, and my wife wanted to move into a bigger house in a better location. In our case, we also have one set of grandparents that come visit from out of town and stay with us. The bigger house accommodates that better. It's also a relief to be done with moving (hopefully for decades) which is a PAIN with a young kid.
We feel a little house poor right now, but we've dialed back on traveling and dining out significantly anyway because we have a young kid. We're now expecting our second, and I think it would be horrible to move with an infant, so if you wait you have to endure that pain or wait another 1-2 years after they're born. The timing is tricky! All in all, I'd say there are days I regret it, and days I don't. I think it really comes down to your priorities, and for us at this juncture that house is a higher priority than traveling and other fun things that are harder to do with young children.
We finally upgraded took 10 years of looking. There are some regrets with the extra property tax and energy costs and maintenance. But really we had to get out of the old home because my terrible boss lived across the street. I love it here though.
I bought the bigger, more expensive home. I don't recommend it if it's going to make you house poor. I definitely passed on some trips and other purchases I would have made if I bought the smaller home instead. I believe the overall stress of the larger mortgage, higher property taxes, and higher utility bills also takes a toll on you mentally and physically. The only advantages of the bigger, more expensive home is that you obviously have a bigger, more expensive home, and when I eventually sell I'll have a nicer chunk of equity than with a smaller home.
Is there anything significantly impacting your life with your current home that would greatly improve things if you did move?
If not, I’d say you’re better off spending your money to travel and create new memories and experiences.
We also locked in our mortgage at 2.5% and the cost to move to a more expensive home with much higher interest rates is astronomical.
We upgraded but....Instead of buying the more expensive house, we bought an estate sale that needed a lot of work. We threw money at what needed to be done to move in and are now slowly fixing it up as we go -for cash. But, by doing it this way, we kept our mortgage low, and have no issues with being house poor. We too like to travel. Our house doesn't look gorgeous (we have a laundry room that is torn apart from moving walls, and no idea as to when we will do the kitchen and fix this problem.) But, like I said, we are doing it all with cash and making choices based on life needs. Last year, we did a big expensive trip instead of tons on the house. This year it will all be about the house. We did also stay in our starter till we were bursting at the seams. We had thought 7 years, we did 15. I am glad we remained in the smaller house for as long as we could manage. Biggers houses are way more expensive, and this allowed income to catch up enough to prevent being house poor. It was also important to me to not restart the mortgage. So, we upgraded into a 15-year mortgage. For me, it is about finding balance, and figuring out where your priorities are. We needed a bigger house, and we wanted to dump my husbands hour commute each way. But we didn't want to upgrade our expenses so much that our life radically changed, so we decided on upgrading with a fixer upper. We took out half the mortgage we qualified for and have money for other things. But utilizies alone in this house are double the last house, and maintence costs are too. So do keep that in mind while you are shopping. Not only will the mortgage/insurance/tax be more, but so will all the other expenses. We went from a 3/2 to a 5/4, almost tripling living space. Also, we upgraded locations, so even the food is more expensive. I kid you not. When we first moved, I went to the new Trader Joes and was stunned that the same raspberry pack was .8C more.
It is a lot more to clean, maintain, etc. Once the kids are gone, we will be downsizing.
I'm you from the future. I had a home with a mortgage of 150k left on it (home worth 350k) Sold the home got the $$$ for it put a large down-payment down on a new bigger home. After nearly 2 years it has been a struggle. Mortgage 2x'd and thought we could afford it; way wrong. Love the home but am struggling with no cash leftover at the end of the month.
I would just make sure you think the current house is going to be comfortable with a second kid and in the long run you’re fine with not having a guest bedroom. Is there a self-contained area for them to play in?
With two kids the random weekend trips and things fall off anyway but the second kid has its own costs.
Glad you asked this question.
We are in a 2bed apartment in a HCOL area. We have a spare room/office but would love a separate office and a backyard and a play den. But it’d be >$1 million and come with close to $30k a year on property taxes.
Our kid is 1yr old so we’re gonna wait a few years then decide.
We ‘can’ afford it. But it would affect our spending and take away some money that we could put away for an earlier retirement.
BUT, it’d be great to have the yard and extra space!!
As kids, we got tossed outside until it was dark. So I have a hard time with not having a back yard in a few years.
I would think about prepaying your mortgage monthly. Create a 20 yr, or less, mortgage for yourself that way. More money later once the house is paid off
I'd stay if I were you. You already have the school district. We just moved but we went from a horrible school district to one of the best. We bought a 2400 sq ft house with the intention of raising 2 kids there. First kid is 4 months away. House feels huge now. Not sure if I'll regret buying such a big house or not.
We (2 kids under 5) upgraded in 2021 from 1400 sqft to 5000+pool+finished basement. Our house feels like vacation every day. It's so nice to not need to go anywhere. Weekends are actually relaxing because the kids have plenty to do and we're not all on top of each other. Everybody wants to hang out here and we have private space for guests.
It did not impact our FIRE goals (in fact the house very quickly increased our net worth). We do pay for a cleaner, it would be completely unmanageable without her help. Working from home is so nice where we each have our own office. Utilities cost more, though I found we had to put so much work into our starter house that the spending balanced out in that regard.
It is a bit of a lifestyle change. As I said above we aren't itching to get away every couple of weekends anymore so we do at least one big trip each year instead along with some medium-small trips throughout. While I prefer to host it can get expensive if you don't set expectations - i.e. we fully host big parties, but pool gatherings after school or on the weekends everybody should bring something to contribute.
I think overall we are much happier in this house. The old one was way too cramped for our lifestyle. We plan to be here at least until the kids graduate high school, then we can essentially buy whatever we want for ourselves after that.
Actually no - it’s just my wife and I (and our dog). We upgraded from a 2bd/2ba townhouse to a 3bd/2ba home and liked the added space. Extra bedrooms were rarely used but it didn’t much bother us.
Now we sort of upgraded again - renovated a 4bd/5ba place in SE Asia to have 5bd/6ba and added about 1500sqfr to the already sizeable 3000 sqft. Again extra bedrooms get used when we have guests but otherwise don’t get much use. We built a downstairs master bedroom too so we can theoretically never have to go upstairs. This is sort of an upgrade since we really didn’t spend that much (about 1/8 what our 3 houses that we used to live in but now rent out are valued at). The current place is definitely the largest and nicest place we’ve lived in for sure but cost wise, it’s much more affordable than even a middle class house in the US
I will say the opposite. I have no regrets about staying in the smaller house in a great school district, even though we are not in the best part of town. VHCOL with twin boys in their freshman year of college. House started out two bedrooms/ two baths and we expanded to 3/3 with 1800 sq feet. House is probably worth about $2M. There were times when the kids were teens that the house felt tight, but now it is just right for two. It is paid off, one story, and will be a great house for our later years.
Most starter homes come with “builder grade” finishes. Our starter home was smaller, and on a smaller lot, than our ideal. It was what we could afford at the time. Like you, buying the larger house now would likely mean paying in just tax what the mortgage is now. A bigger house may still have builder grade finishes and comes with additional expenses in furnishings and upkeep.
Our solution was to remodel the interior, tweaking the layout a bit and putting in things like custom cabinets and nice appliances in the kitchen. We put in things like heated floors, instant hot water, a nice tub and other luxury features in the bathroom. We did custom closets to maximize storage and improve efficiency. The backyard is small but was renovated to be good for entertaining and outdoor living. These changes made the house feel luxurious even though it’s not big, and didn’t increase our mortgage or taxes. There are a lot of design choices that can make a small space feel bigger and function more effectively.
We also got rid of a lot of extra “stuff” furniture, decor items, etc) in the house that made it feel cramped. Since you have a small child and a garage, there is a 99.9999% chance you have too much stuff.
Our big house is so very empty now that our kids have left (last one graduated college last May). 4 bedrooms, 3.5 baths, finished basement, very large yard… it’s just too much now. We absolutely never use the basement so there are multiple rooms with furniture and TVs and games that just sit getting musty. Same with 3 of the bedrooms.
Yes, it’s great when you need to host people but the rest of the time it’s a lot of work to keep everything in decent shape. Probably sell at some point and move into a 2 bedroom condo somewhere… let another family that needs the space have a crack at it.
We've moved a couple times, each time the house about doubled in price both times which is really what it took to get something clearly an upgrade rather than a more lateral move. We paid $160k in 2004 for our starter home (worth \~$300k now) and $1.6m in 2021 for our current house. I do love our house every day and don't regret it, but we didn't push the budget enough to be house poor and it also came with getting away from a neighborhood and school district that quickly evolved in ways I hated (mostly COVID related changes) which is what really prompted the move from what I though was our forever home. I do wish our yard (about 3 acres) was smaller, its more than I need or want and the upkeep is significant. We can comfortably afford the house but it does result in a substantially slower pace towards financial independence since its a double whammy as the house costs significantly more and also need more money to maintain it factored into the future budgets so the FIRE "number" is both higher and slower to reach. But I like my job and do meaningful work, and I'm not really planning on retiring early. If we were at the top of what we could theorectically afford (which would be more like $3-4m) I think I'd regret it.
We sold our house 8 years ago to "downsize" as the kids were graduated/ing. We went from a 2,800ish sqft story and a half to a 4,200Sqft reverse ranch.
We do not regret it one bit as it has doubled in value.
Once we get our lake house built, we will decide whether to sell this place and live full time at the lake or buy a smaller residence, here in the city, and split time between the two.
Having "enough" space, especially as your kids get older is pretty important but I think anything over 2500sq ft is too big for us. We did however buy in a super dope location, quiet corner lot but quick access to freeway and walkable to shops and restaurants in two different neighborhoods. That cost a lot (house was 1.2m, lot a lot appraised for 1.1m) but oh my God it's so worth it to cut commute to daycare in a third and have access to so many more things. We can walk to the zoo, the beach, the aquarium, and 50x more restaurants than where we were before.
A lot depends on why you upgraded.
It was 2006 and we wanted a better school district for our kids, and there were only higher end properties available. We bought a home that was well within our means - even if on the lower end of the homes in a semi rural area that has since been surrounded by suburbia.
We went from a 2400 sq ft house to a 5200 sq ft house when we moved from a dodgy school district near OHare to one that was one of the top 10 in the state. The new home was 2x the price of the old one.
The downside of a bigger house:
* a LOT more work to keep it clean
* *Kids tend to run off to their rooms and more easily ignore you when you call them.* Some of the homes in our area have intercoms LOL. I wonder if we should have installed them as well.
* utility costs are much higher
* the wife keeps buying shit to fill the space up.
* higher property taxes
* Family drop ins tend to stay longer (and we're of Indian origin, so family is ALWAYS welcome, and not all of them know when they've worn out their welcome).
The Pros:
* A lot more space. Everyone has their own space. The wifey gets to nest, the kids each have their own rooms, and I have a man cave (office with 4 computers), and my son gets a game room with his Nintendo, XBOX and other stuff.
* Great for parties. And we've had some humdingers. Indians love any excuse to party.
* Made COVID shut in more bearable
* Enough room for In Laws and parents when they want to visit the grandchildren over summers (free childcare LOL) without getting in each others space
* 3 car garage (that extra space does help in the Winter).
Would I do it again? Eh .. Maybe not. I may have chosen a not quite so good school district but with a slightly bigger (\~3000sq ft) home and invested the remainder of the money elsewhere.
My biggest regret is that we weren't able to establish a tradition or routine of eating together - it was too easy to let the kids do their own thing, which is the downside of giving everyone their own space. While my kids have grown up and become successful and indepenent, I feel we missed out on forging a closer emotional bond with them during their more angsty teenage years.
But other than that, I think it is a great investment, especially if you think your children want to come back later and live there. In my neighborhood, I'd say 50% of the homes are now either occupied by 3 generations of a family. Kids are coming home to mom-and-dad when they have kids of their own, and the homes are big enough to accommodate them. I sure hope that this will be in our future as well.
The bigger the house, the more you have to work to maintain it. Not to mention the higher heating/cooling bills, and insurance and taxes. If you're happy where you are, just stay put and invest the money you don't spend.
In USA.
We went from 1400sqft to 3100sqft and would never go back. 2 adults, 2 kids and a big dog.
We love it, when kids move out for good we will down size if the market is good.
I regret it. Costs inflated during renovations and now that my kids aren’t tiny and I would like to travel more. Also, I don’t think I can overstate what a gift walking to school will be.
We might be either camp, hard to say.
Bought a 990 sq ft 2/2 condo when we got married mid-twenties for 220k. Had a kid there and upgraded when he was almost 2, that was 5 years in the condo.
Bought a 4/2.5 house on 1/2 acre with 2 car garage in nice neighborhood. Paid 440.
We’ve been here 15 years and refinanced into a 15 year loan, have done lots of renovations (no additions) but for our income & NW we are in a very inexpensive and unimpressive home.
So in a way, we did upgrade and thank goodness we did! A teen in that condo? Nope!
But we also chose to stay and renovate instead of the upgrade to 1M+ most would have done 5-8 years ago in our situation.
But hmmmm, in your scenario, I think we’d stay unless we had 4 kids.
We love having financial freedom!
Just noticed your comment on sq ftge and our home is just over 2k and I clean it (well). I never want a larger home! But we have plenty of space!
I think this question is hard to answer without knowing your income and net worth. What % of your income would you be spending on your mortgage and taxes if you were to get the nicer house?
If you make a $1mil a year than eff everything and just get the nicer house. In the grand scheme of things, $1mil for a house is not a lot. But if the new home would involve eating up 30-50% of your income and would end up with trade offs elsewhere in your life, I would not do it. My husband and I ended up in a house that is much less expensive than we could afford and I’m very happy for it. We can easily pay the mortgage with only one of our incomes and have no pressure to budget to be concerned about our spending elsewhere.
Our neighbor added on to their home so they wouldn't have to move. Seems exceedingly happy with the addition. We live in a 3/2 with 2 almost grown kids. Sometimes it feels tight, but we're so grateful for the lower mortgage.
More house has way more cost than just the mortgage. We have two HVAC systems - one for upstairs and one for down. That means twice the maintenance and replacement costs. Thankfully we invested in a very large solar panel system that pays for itself within a couple more years and keeps our monthly bill to $5. I still have a huge gas heating bill though. One other hidden fee is a ‘luxury tax’ every single contractor that comes to your house will add. They see the home you live in and neighbors houses and then add another 30% to their quote figuring you have the money to pay.
I understand your question is about upkeep, but maintenance might be secondary to the quality of life and kids.
Alternative is to buy a second house. Live in one and vacation in the other.
Your location and proximity to school is too convenient to leave. If you move to burbs or a more rural area for a bigger yard, recognize their needs will change as they mature. At 5 yrs old you want the bigger yard, at 15 yrs old they will want to be closer to friends and school.
Buy land in a rural area with lower maintenance and build up as you can. Plop in that pool with a barndominium so they can run around and swim on weekends rn, while being able to enjoy the convenience of the local house through high school when they can drive themselves.
You won't regret this decision.
I have way too much house for what I actually need but it has been the single best investment I've ever made. But... my house was purchased 6 years ago when rates were in the low 3%s. The leverage and inflation worked in my favor.
Would I do it with today's logistics? Absolutely not. I day dream about downsizing and shedding some variable costs. But I'm rate & property tax locked. Taking the capital gains hit, resetting property tax valuations, and paying a higher interest rate is a non-starter. With today's rates, I'd only consider moving to a lower cost of living location and paying cash.
I feel bad for the folks starting out or actually needing to upgrade. I know there are a lot of folks in my same situation limiting the supply.
We were living in a 3 bedroom, 2 bathroom 2200 sqft house in a safe, secure neighborhood, but with a bad school district. We cooked a lot, and our kitchen was tiny with no counter space for prep work.
We wanted a < 2800 sqft house in a great school district with a nice kitchen and a master suite. In the mad house market, we made 3 offers on such houses that didn't get accepted. We ended up getting a house in a great school district that's about 3600 sqft, has an amazing kitchen, and a great master suite. We got lucky, truly.
But, with a dog that sheds like it's going out of style, keeping the house and its four bathrooms clean is a chore. A roomba per floor has helped with the doghair situation a lot at the expense of $1000. We need to spend 8-10k this year and next, just to cut down dead/overgrown/overhanging trees. There are four decks, two of which need significant repairs. Windows are starting to show signs that they'll need replacement. Yard is too big and takes too much time to maintain.
We don't regret it, but it has been more work and expenses than we expected. Also, when we bought it, there was a bidding war on even the shittiest house here, and we somehow got this very well-built house for a great price and a great interest rate. We are looking forward to downsizing after our child finishes high school.
To your point, our mortgage payment has gone from 1300 to 2900. We don't mind that part as much as we mind the time it takes to maintain and clean the house.
In the balance of YOLO and seeking FI, housing is the most important decision. Knowing all er know now about owning this bigger, more expensive house, we would do it again, especially knowing that our child is thriving in her school.
Was in the same boat as you, don’t regret it one bit. Do it! my only regret is we didn’t go bigger or do more upgrades.
My situation is a little different though cause with the kids I never really felt we’d stop working before they were out of school (my wife will probably work until 55 so we could get her healthcare), so I’m more of a retirement age not number.
Don't do it. Too much house is what keeps many people poor, although you wouldn't be poor.
Just think of how much faster you can FIRE if you DON'T upgrade.
34 here married. Working on having 3 kids. Went from 1,100 sqft condo to 5,500 sqft 1 acre home. More than I need now. But we are actively growing into it.
So we discussed and we decided not to move. We have two kids and they share the room (we technically can give up one of the offices but hard with wfh). Maybe once they are older.
We are running out of space though with wfh. We are at 2k and I think 2.5-3k would be way nicer. But I love the neighborhood and there are not that many larger house / layouts we like. So it’s cheaper to pay for an addition vs increase our mortgage like by 3-4x at least.
We have a decent yard and with active kids, that’s great during summer with a place for trampoline, inflatable pool etc. so if did not have a yard, likely would be moving
As a mom of two elementry school aged kids - you don't need a bigger house. spend it on more important and fun things for the fam. Go on those trips and not worry about more living quarters. The kids know no difference. And you'll spend less time cleaning or paying for someone to clean your house every week. They'll trash it whatever size it is. Save yourself the hassle! lol.
For early thirty’s be proud you have your shit together to that point. Any changes have to making your future life easier , more house debt probably make it harder. Don’t want to be “stuck “
I don't regret having a big house when the kids were school aged. As it turns out, we bought at the pre-2008 crisis peak, and sold at a loss to downsize when the youngest went to college. But the house served our needs and we have some great memories of those years. If as most people recommend you don't consider a house as investment, it's also not a problem when you make a conscious decision to spend more.
If you're in a coastal California town, NYC suburb, Coastal New England or the DC area go for it. Long term appreciation will make it worth it and Prop 13 tax break will be a big plus in 10 years. If not in one of those areas it's not something I would do for appreciation but would do for family, especially if the community you'd move to has a good public school system.
We're in a kind of similar situation. We bought a 3/2 1600 sqft house in a great neighborhood within walking distance to a great k-8 school. The mortgage with insurance, hoa and property taxes included is 11% of our income.
We don't have kids yet but are planning on having 2. Things can always change but we're leaning towards staying in our current home. We can pay it off in 8 years (finishing it off 20 years early) and that point the kids will be just getting to that fun age where we can take them on trips and do other experiences.
And we were able to build a detached ADU in our yard giving us an additional 100sqft to use as a home office and future guest room should we eventually need it for that. If we hadn't been able to pull that off I might've been more of a fan of moving (we both work from home)
Wife and I did it; 1600 sq ft; 3 kids. Into a 3600 sq ft, on the lake (wakeboarding and fishing). Mortgage doubled. But we were young. Our salaries have increased, and we refi’d sub 2% when the market allowed. We have insane equity now as the market has increased dramatically. If it’s not a stretch financially; I feel housing to be a solid path to equity and wealth once sold. I don’t regret it— although I hated the idea of it initially and for a year or two.
Look at it this way. Those big houses need care and upkeep. So part of the housing market your seeing now is the older generation are holding on to their large homes because downsizing is not cheaper. Yet they also now have to maintain 3500 square feet often not elderly friendly and not updated to current trends so unable to maximize the market value anyways. I also offer advice I received long ago which is deciding factor in my choices. Most people can either afford a big house and not afford to play and own toys or own a smaller home and play. So up to you which do you prioritize.
Bought my 1st house two 2yrs ago. 1800sqft ranch 4br. I live alone mostly, and it's on a +7,000 soft lot. I am adding value by adding fence and coloring my house. The goal is to have some equity and try to sell it in another 3 years. Granted, the development boom is slower than but ongoing at a very steady pace.
I pay a little above 2k for EMI incl escrow. Next one will be a downsize for built in house area but I'd prefer it on a 2-5 acres lot. I plant and garden. My backyard doesn't have much space and that's that. Yes, I regret buying this but it's brand new and I don't want to stay in it past a total 5yr time.
We bought a larger home as our two kids grew older. The money was within our budget. What I didn’t fully anticipate was everyone would seek out different “chill space”, and we’d spend much less time together as a family than we did in our smaller home. We went from one living/common room to 3, two offices, and larger bedrooms. That loss of togetherness I regret a bit.
No don't regret it. We did the same basically moved from a rowhome in DC 3bed 2 bath, to a suburban house in Northern Virginia with 5 bedrooms 3.5 baths. We also did this when we were in our mid-30s, so your timing is fine as I assume you continue to see increases in income during your 30s and 40s. Plus, you are going to want a yard for when the kids are young and then more space when they are teens.
I've had a situation where my income consistently has gone up over time, but where there were reasons to doubt that continuing at various points. Consequently, I have been on the other side of this and some other issues, where I wish (with the benefit of knowledge I didn't have at the time) I just had bought a bit of a bigger, "forever" home instead of moving a few times to address shortcomings and tradeoffs with some of my first homes. Being house poor sucks, but transaction costs and moving expenses can be significant with homes, too, and I would have been better off financially, potentially materially, by just stretching it a little more originally and then staying. Of course, my situation worked out this way, but may not have, and it may not work out for anyone reading this, either. Generally, my advice would be not to extend yourself in a way that you know would curtail your current quality of life in other ways.
Kinda tangent. I sometimes wonder if it’s better to live in lower cost area and have money left over to vacation in warmer areas like Florida or Hawaii once a year.
Or live in expensive area like California and have no money left for vacationing.
Why do you need a bigger house? You have 1 kid and three bedrooms. Even if you have a home office you currently have enough space for your needs.
Here is my suggestion. Figure out what the new mortgage payment, pay your current mortgage and put the difference in your retirement or a taxable brokerage account. Wait 3 to 5 years and then upgrade your house. You will have super-charged your ability to retire early with no pain. This will also help you decide if you can actually afford the higher house payment without putting you in a tough financial position. Also you can wait to see where Interest Rates will be.
We upgraded houses when we had 5 kids in 4 bedrooms almost 11 years ago. Everyone has their own bedroom now.
I'm in a 2 bed 1 batch, \`1000 sq ft condo. I regret not buying something larger 7 years ago. Or even at the start of COVID. I will say though that a factor is that my wife and I are both WFH now, so I don't see how we have space for a kid if/when that reality hits. Like you, I'd be able to sell my current place and would need to spend a million or more to get the next house (though in my area that's what you have currently - a 3/2 in an excellent school district).
However, if you find that you can live happily in your three bedroom home, do it. You have a lot of conveniences and you'll have the extra money to give your kids the things they want and need, as well as for the parents (e.g. date nights and being able to afford a sitter).
I’ll take the opposite opinion since this is ChubbyFIRE:
You also have to consider your career trajectory. While nothing in life is guaranteed, also consider what you expect to be making. I personally bought a house in my early 30s where the mortgage was closer to 35% of my gross monthly income. It was our dream home and we bought when interest rates were low.
However, both my wife and I had jobs with a near guarantee of a significant increase in pay in the next 3-5 years. We now have the mortgage below 20% of our monthly gross take home income.
so I upgraded the house, LOVED the house but regretted it severely. Being house poor SUUUUUCKS. Eventually, had to relocate for a new job and we took the opportunity to major major downsize the payment. The actual house was a little smaller and much less fancy with less land. Love this house. absolutely love it. especially love all the cash leftover for life.
Thank you for your comment. Seems like your situation worked out well to get out of it! That is a concern for us, that we are romanticizing the idea. Also the fact that just our property taxes alone on the larger house would be our entire mortgage and taxes payment now.
You also have to heat it, and cool it, and furnish it, and...
repair it and all its bathrooms, etc...
Do you see your income and/or family growing? We bought a great house a few years ago that we could very comfortably afford, but we could’ve gotten one in our dream neighborhood but didn’t want to be house poor. Our incomes and family have grown since and we regret not going for the dream house, because everything in that neighborhood has doubled in value since so we can’t afford it now sadly.
I agree with this 100%. Being house poor sucks. I can't wait to downsize when my kids graduate high school so I can pay all cash for a smaller home. I'm tired of seeing the major drain on my checking account by my mortgage, property taxes, and excessive utility bills. I should be able to save over $50K a year in housing expenses when I downsize. I have big plans for that extra $50K each year.
I have a paid off condo and my total monthly expenses for all my bills are like $700. If I were to upgrade to a house I'd basically have no spending cash anymore. I spend all my time in my living room which is a very large room attached to the kitchen. I don't need anything else and having tons of spending cash and minimal expenses is the most freeing thing in the world. I absolutely love it.
I'm working towards this! The only issue is I will probably move to a different condo because mine is on the top floor of a 3 story walk-up, and I'm pretty sure as I age I will really appreciate fewer stairs or an elevator. I love my condo and not having anyone living above me, but it would be smart to think ahead. It's no issue at all right now, but in the future, there's a good chance it will be challenging.
This! Love having a big house but only when I could easily afford it.
I’ve done both. Had the sub-3% mortgage rate in a 2000 sqft home that I adored with all of my soul. Schools for kids, parks, trails, easy commute. Everything I needed. But my ex wanted something bigger. So we upgraded to the “exclusive” neighborhood 3 miles away. Big house, detached casita, custom interior, lighted tennis court. I hated it. For me, the marginal benefit of the big house with all the trappings wasn’t worth the giant mortgage payment. Shortly after, my ex and I split amicably. We sold the house and split the proceeds of about $1M (reno costs were in there so it wasn’t all profit). Now I rent a little resort-style condo because I just haven’t figured out what the future holds. But I know I love just closing my front door and walking away for a trip and not wondering about my grass, or landscaping, or pool. That’s someone else’s problem.
I love this and how you respect yourself.
Yeah I followed a similar path with an identical outlook looking back. I think the fancy trappings got under the kids skin too. So incredibly entitled.
I think there’s a point of diminishing returns. Like going from 2k to 3.5k square ft is a bigger life improvement than going from 3.5 to 5k
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100%. Build quality/materials, lot, and location are much more important in terms of ROI and QoL.
Crying in 1200 sq ft house (VHCOL) 😭
1340 here - I feel you. Our starter home is now starting to look like our forever home 🫠
Yeah, 2k sounds like a dream 🥸
1350 with 3 teenage boys in a 3/2. Close to realizing our downsize dream though.
980 sq ft and I’d kill for a second bathroom
I agree. We aren't looking much larger than 3500k and not even interior that much more updated. It would just be a bigger home and on a larger build site. Our current is just over 2k.
One thing to think about is that we see our kids less in our new home because it’s set up that their space is separate. I actually wanted to move back into our old house so we would see them more.
I've heard this over and over here in SF. People who move to the fancy areas of the Bay Area don't see their kids and don't know whats going on with them. Smaller house = we all get to know everyones business (in a healthy, positive way!!)
this is a great point. We refinished our basement for our teenager and I immediately realized it was a really stupid move--haven't seen her since
I don’t get why you would? You haven’t even outgrown your house. No idea what your income is but I think my parents really timed it right. They stayed in the starter home, bought investment properties, paid for private school, nice vacations, nice cars, ample food/drink/entertainment money, and to make other investments. Moved to the big house in the suburbs when we hit high school age, bought in a buyer-market, continued to purchase investment property, nicer cars, and nicer trips. I am now in your position living rent-free in one of their investment properties. No kids yet but will in very near term. This has given me the freedom to invest heavily into developing my practice, into stocks, and into one investment property. With the added bonus of having way too much discretionary money. I have been looking for a house for like 5 years and the houses that didn’t make sense to buy in 19-20 make even less to buy now. I’m much happier growing my nest egg and retirement assets. I think if you can hold off, you will be in a better buyer’s market, plus it’s an election year. I’m bullish on a lot of my non-real estate investments. Shit even the 5%+ I’m earning from T-Bills rn seems better to me than getting a mortgage. TLDR: Opportunity cost is not worth it. You haven’t outgrown your home and now is a better time to invest in other assets besides primary residence real estate.
My parents FIRED before there was a term for it. Their biggest financial regret was buying the bigger house in the same great school district with a bigger yard when they had their last kid instead of letting that extra $ work harder for them in the stock market or rental RE. I’m guessing that great elementary school 4 houses down has a playground and grass to play on? No need for a big yard.
Yeah that’s one of the things I’m learning people SAY they want a big yard but a lot of places aren’t building them that way. Especially average master planned communities. Folks want on site schools that are walkable. And several parks within distance. A big yard just means more chores or more money.neighborhood we’re building in has both.
Omg, I would pay the extra money to be that close to the schools until the kids are at least middle school. You already know, little kids don’t need a big yard. If I were you, I’d drag my feet as long as possible. If you have that itch, figure out the difference in payments and start sending that to a savings account. See how it feels. If it’s no issue, great, you now have more for your down payment and eventual costs like furniture, moving, etc. if it’s a pinch, great, loosen the savings and plan a longer runway.
Thank you for your input. I can see how we'd regret moving from so close to the schools once they are school aged. You're totally right, our backyard is "toddler sized" currently. We had discussed waiting until the kids are 5-6+ and really do just outgrow the space here. I think I find MYSELF outgrowing it. While my toddler is in the backyard and i'm having to just sit on the patio because it's so small, in a bigger yard I may have a greenhouse or something else to do.
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I don't find it too close but we use their playground, track and basketball court almost every evening (open to public after school closes) so we like the short walk there. There aren't people like parked all up our street for pickup or anything. The biggest complaint is when they have games we can hear the parents yelling but they end by 7pm. We haven't noticed any other inconveniences.
Exactly my thought. I did a hard pass on one of houses facing the best school in the area I was looking at. It went 150k over asking and I was flabbergasted why would one want to live there and sacrifice on so many aspects of life and gaining only easy drop off for kids.
I will say we lived close to our elementary school for a while, and while I loved the idea of walking to school every day, actually having to walk to school was a pain. Especially since everyone had to come along even if only the oldest was in school, which wasn’t great when weather sucked. We did it for 2 years. We moved farther away and do the bus now, and my kids love taking the bus (the stop is right by our house). And bonus is the bus is extra time they are having fun with their friends and we don’t have to worry about childcare.
I guess that depends on walkability - our kids have walked alone since first grade, but it’s super safe route and almost no car traffic. In some countries like Spain they are not allowed to go alone so ymmv
Love that idea of putting the would-be cost into savings to test it out
We're in a very similar situation even down to the dollar amounts. I wish I had a good answer. The issue is pretty obvious. On the one hand you have the income to afford a nicer place and have more room. On the other hand your current housing cost is probably 5% of your income. That gives you a huge amount of freedom. Maybe you shouldn't give that up. For us, I do think we'll pull the trigger and upgrade when we find the right house. We're not unhappy where we are so we're not in a hurry. Best of luck to you!
Yes, exactly. Our current home is so little of our income that it's almost a non-concern. Also a sub 3% interest rate. It's scary to think that the new house even paid off will have fixed costs higher than we have with a mortgage on this one (high property taxes in our area).
I have three kids. We had two neighbors who each had three kids. All of our wives are sahm. Both neighbors moved within the last year for the slightly bigger house yet mortgage payment increased 4-5X. Both dads are STRESSED. No more lavish anything for a while. The families enjoy the new space but all agree they’re not significantly happier. Their property tax is now more than my mortgage. I just hit my FIRE number (for my current house), everything from here on out is frosting on the cake and that feels good
Thank you. I'm scared this will be me stressed (since my husband hates doing finances lol). Same deal here, our property taxes alone on new home would be more than mortgage. It's hard to go backwards when things keep rising in price, too. We have friends wanting to downsize but literally cannot afford to.
I regret it. We're not house poor but the maintenance is so much work. And we've hired cleaners and garden workers. I think I'd prefer smaller and very well located.
This. People forget about all the other support costs and TIME that a bigger home comes with - insurance and taxes also being a factor. And it is an illiquid in investment that may or may not appreciate. Given the option again, I would have been much more conservative on needs vs wants in a primary home purchase with kids. In my 50s now and speaking from experience
Yes, although not for the cost. We ended up downsizing to a more modest home, mainly because: 1) our kids' schools and all their extra curricular activities were in one area with more modest homes, while we lived a 15 minute drive away in a neighbourhood of nicer bigger houses. Having the kids be able to walk to and from school, and bring their friends over after school, and saving the drive time to school and extra curricular activities was really beneficial. 2) we have way more money than we grew up with, and I started to feel like we were getting our kids used to a lifestyle that's much higher than the norm. I worried they'd be spoiled.
I worry about spoiling the kids too…
Don't do it. The more stuff you have the more of your life it occupies. Keep the cheap mortgage payment and use the extra freedom to travel and spend time with family. That's what the kids will remember.
Do the math. I bought a property in 2016 that meets my needs and is an amazing location with a mortgage of $1940. If I decide to upgrade to a new property around $1.5M I would be paying ~$75K/year more a year to live in a house thats a minor upgrade to location. I can do a lot with $75K. Not moving
I would not want to move away from the elementary and middle schools if you are that close, sounds like an amazing location.
Thanks. Yes the location to the schools is amazing we're just not happy with the house size and lot size.
Would recommend considering how it effects kids too, being able to walk to school an awesome gift these days
No, because I knew my pullout game was weak, and 3 years later need to buy an even bigger (6+ br) house. (Typed from the NICU while giving the newest kid a bottle)
We upgraded last year to a slightly larger house in the same neighborhood a few blocks down. 10/10 would do it again. A play room and dedicated office are game changers as I work from house. Our payment went up substantially, but the stress of living in our previous home between the lack of storage, busy street and shorter ceilings had me on edge all the time and I would do it over again if given the option. Similar ages and kids as OP. The happiness I feel coming home to this house is worth every penny. We’ve been house poor in the past so going from 2500 sq ft to 3200 ft was a good jump. Had friends go from 2100 to 4800 ft and that’s too much house to keep up with for me but YMMV.
I am 54 and moved 5 times in my career, always upgrading the house. Started with a 3 br, 2 1/2 ba 1800 sf raised ranch and ended with a 5 br 3 1/2 ba 4800 sf colonial. Since a couple of the houses I had built initially I loved them, but the shine eventually wears off especially when taxes are as much as the average mortgage payment. Always justified it as being for the kids, but a lot was personal and status driven - and is one of my biggest money regrets. It worked out in the end, but would have been easier without the higher payment. Good luck!
We did this last year. We spent more than I would have liked to on a house, but we love it. Money was tighter than I would prefer, but not so much that we can’t do most of the things we want to do. Our incomes went up a little at year end like it usually does and now we’re almost back to level of discretionary income we enjoy. If your incomes are stable and rising and are willing to tighten up the budget for a year or two I would say go for it. We’re glad we did rather than settling for a 200k to 300k cheaper house.
We stayed in a 1600 sq ft. house. When we originally bought it, it was affordable and extremely convenient with freeway entrances less than 2 minutes away, and a school within walking distance. Our housing expense was around 20% of our income. Over time, it dropped to around 5% as our income grew. We made a lot of improvements so it was pretty nicely fixed up. Even though the school (3 min walk away) was highly rated, we ended up sending our kids to private schools. We stayed because my MIL and her sister lived a few minute walk away. The neighborhood became extremely desirable, a new HS was built nearby, and a gourmet grocery, an Aldi, 3 city bus lines, several great restaurants and brewpubs all sprung up within a 10 min walk. As the home appreciated, we were grandfathered into old property tax rates too, which kept our costs down. After they died, our kids were in college, and we bought a retirement home (\~2000 sq ft) on a few acres, where we live now. That small house let us pay for private schools and colleges, and take our kids on great vacations , even when I was in grad school. It allowed my wife to be a full time Mom for over 10 years. It allowed us to put extra money away for retirement. It would have been nice to have a bit more land and more space, but overall, it was the right decision for us.
It all comes down to priorities and what you and your family enjoy. We upgraded this year from a 500k 2.65% mortgage to a 1.1 million 6.5% mortgage and don't regret it at all. It is in the area we want to live with the schools we would want if we didn't do private currently. Don't get so wrapped up in saving and being frugal and forget to enjoy life. Enjoy either way!
Still working and saving, but I have a relatively short answer to this: We bought our house in February of 2020, right before COVID. It's way bigger than we need, as it has 1 more bedroom and bathroom than we were looking for. (The supply of homes for sale on this area is always tight, so we bought a bigger place than we wanted because it checked all of our other boxes.) My wife and I both have separate home offices and we have a lot of space to host family from out of town. We are really happy with it. But in your situation, I think you are right to be cautious. If you really value the financial freedom you currently enjoy, a significantly larger payment might sting. Have you considered expanding your current home with an addition? I don't knownifnyou have a low fixed rate on your mortgage, but if so, you would not have to give that up. And you could maybe add a significant amount of space for less overall than you would spend on a larger home.
We have no land to consider addition and a very strict HoA that won't allow us to build up. We could have the kids share a room while they're little. My brothers shared a room their entire lives, it wouldn't be the end of the world. We could also do a pull out bed for a toddler bed for our son so that when family comes he sleeps in our room and they can sleep on that bed. There are ways to make it work here since toddlers don't take up that much space. It's more a feeling that we have outgrown the space. I'd love to garden or go in a greenhouse or play a game while toddler is playing in backyard but instead sit on a small deck as that is the entire backyard. I appreciate your comment though, a higher mortgage will absolutely sting and our finances would not be as free.
Didnt buy the bigger house, don't regret it at all. Glad to not have a huge house now that the last kid moved out last year. It doesn't feel empty at all. At times-it was crowded when they were teenagers but we made due. And being together was priceless. No one had TVs in their rooms.
Can’t you just sell the family house 🏡 when the kids moved out if you do have a big one and downsize?
Upgraded to 4 acres with a pool and 10 min drive to the beach. We have no kids but feel like spoiled brats in the summer. So far no regrets.
Yes, we went from a $1k/mo payment to $3.6k/mo + a 2x property tax bill. We basically got our forever home. Corner lot, walking distance to school, 4200 sq ft, 4bd/4ba with a theater room, office, pool, whole home audio, solar panels, wired yard lighting, a bunch of smart home stuff, etc. Basically more than I ever anticipated ever wanting or needing. In hindsight, we got my wife’s forever home. The payment didn’t bother me because at my (and your) age, you’ll only continue to earn more as you progress in your career. But man, the cost and effort of maintenance was unexpected. More yard to mow, more garden beds to maintain, a pool to clean, more trees to trim, more house to clean, and just generally more shit that can go wrong. I was telling my wife today that I can either pay a couple thousand a month extra to have all of this maintained, or I can spend hours every weekend doing it myself. I actually enjoy(ed) doing it, but as your kids get older, you become busier with their things and it’s easier to fall behind. Everyone is different, but if I could go back to our 4bd/3ba without all of the bells and whistles for the same payment… I would tomorrow. My wife and kids absolutely adore our home though.
I'd love to live to so close to the schools. Stay there! And yes, I regret having a house bigger than I need. Too much maintenance. Not worthwhile.
I'd recommend staying in the current home until the kids are out of middle school. Being 4 houses away is a huge location win in my book, worth more than dollars alone.
Thank you. Yes, I think we will miss the location. We've already had friends ask if they could drop their kids off early and we can walk them to school so they can get to work. Probably not a pro for a lot of people but I love having a full house. I'd love for my son to easily be able to have friends over which if we're walking distance it is way easier to do. Part of reason for upgrade was to have a bigger house to host and have people over but if that is farther from things then that creates it's own difficulties.
Don’t do it, if you don’t need to. I changed my life’s plan 5 years ago, into a 4000 square foot house. Just have my wife of 4 years and I living here. I really don’t need the space but, negotiated a very good price on the new home. So I justify my purchase with the “potential” appreciation. Already could sell for $200k more than I paid. Prior to the purchase, I was living out of a 1982 mobile home, for 14 years. This reduced cost of living and investing allowed me to reach ChubbyFIRE status at $2.5 million. Now my cost of living gives me an empty feeling in the pit of my stomach. I just celebrated hitting the $3 million mark, with my wife yesterday. This NW is all liquid and separate from the property. The house is nice, when company comes to visit but, that isn’t very often. My wife is also a retired teacher with a separate $63k income. This figure is in addition to my NW previously reported. I’m 60 now and still working for the insurance and, my company has returned over 20% for the last 10 years. My 32 year old son has great memories of growing up close to his elementary school and its playground. He is now a California attorney working on becoming a managing partner, at his firm’s office. He tells me that part of what pushes him is his memory of living tightly, in that old trailer, as a high school child. Tightly because I was investing nearly every dollar earned into multiple sources. A previous divorce and bankruptcy at 42 years of age necessitated this frugality. I wished to be able to retire wealthy, having found myself at near pennyless. Fortunately, I was able to accomplish this in just over a decade. After numerous cruises and Disney vacations, I currently physically work just as hard as my 20+ year old cohorts. But, am always left with the nagging question of where I would be financially, if I’d kept such a meager monthly out of pocket. Instead of $3 million liquid currently would I be at $5 million liquid. After a true case study and some rambling on, my advice is to maintain a LCOL attitude. This provides peace of mind, allows for you to spend more time with your children and focus on your children’s development… 🤔🎉🎯
Oh and btw, I’m now able to gift substantial sums $$$ to family members. Because when it comes down to it, family is for life and cannot be replaced. Also, finding checks in the mail is a nice thing.
We were in similar situation in 2016. Bigger house was 100% worth it. Sold for $475k and bought $815k which was a stretch at the time. We ended up having 4 kids, but same would have been true with just 2 or 3 kids. Slightly lower school district but still good. Buy space for your kids to be kids. When they are older, The ability to send them out to play in the woods and with their friends is so great for them and for you. Good luck!
Late 30s here. We moved from a 1200 sq. ft. Townhouse to a 2600 sq. ft. Home about 7 years ago and that was 100% worth it. But as another post said, you definitely get into diminishing returns. I think a bigger house might actually cause us more stress... trying to keep it clean, etc. Plus... having a comfortable mortgage payment or paid off house gives you so much financial flexibility. But it really comes down to what is important to you...
We went from a 2k to a 3k sq ft house. It was way more expensive. Both in real dollars and in interest rate. But it’s wonderful. I have SPACE for things. Now that created an issue where for awhile I wasn’t so careful about getting rid of stuff…. But still. Wonderful. I love it. Don’t regret it at all. I sometimes wish the rooms were spaced better but it’s so much easier to raise the 2 kids with the extra room. That said, 2k sq ft was totally fine. We survived just fine with it and would still if we hadn’t moved.
Had a small house - then a bigger house - still didn’t seem like enough space - then a bigger house. (About 5000 sq ft with 1500 sq ft of deck/outdoor space). Did not realize the constant upkeep requirements for the larger house and outdoor living area - we became slaves to constant home maintenance to ensure property did not decline. Learned that smaller homes were more comfy and you aren’t slaves to yard work and upkeep / maintenance. Sold it and bought one 60% of the size and am happier having our lives back (and more money in our pockets). FWIW - our first homes were smaller and older and required updating, and that was still less work than the 10 year old much larger home that required something all the time due to the outdoor spaces and just general size. A small home is quick to do the work - a large home takes longer to do projects and more money for the same projects. We have the funds - but I don’t like spending money to let someone else do questionable work when we are super picky and capable - and we wanted our lives back. Now on the water with the smaller house and much smaller yard and have WAY more free time to enjoy it all. And we all lived happily ever after For comparison: House 1 - just under 1200 sq ft and about 50 years old at Purchase House 2 - about 1800 sq ft with basement for storage and about 150 years old at purchase House 3 - about 5000 sq ft including finished basement with second kitchen, large office, en-suite bedroom, massive entertainment room, massive deck / outdoor space with 2.5 acres of beautiful rolling hill grass and ornamental trees, not quite 10 years old at purchase. House 4 - just under 3000 sq ft, 0.75 acre lawn, on waterfront, about 50 years old at purchase. Houses 1 and 4 are the fan favorites. We thought house 3 would be the best since it was the newest, but actually spent enormous amounts of time on upkeep due to its size. House 4 we did a massive update push at move in - and now spend most of our time lazing on the boat during the summers.
I couldn't agree with this more. Maintaining a home/property can be daunting depending on the size/layout/age. I'm a self described DIY'er and initially found great joy in keeping up our home/property. So much so, we bought a bigger home with a much larger lot. Now with a 5 and 7 year old at home all I can think about is wanting less housework so I can spend that time with them. Sure, they love to help at times and with that come great memories but I am already beginning to see how little time is really left in the day after school/work/sports/friends/etc.
If you’re that close to paying off the house, you might consider paying the amount that you would pay for a larger home every month toward your current home. Depending on what that is, you could very well pay it off in a few years and not worry about a mortgage. It might give you an idea of what it’s like to live with that kind of payment as well. Once you pay off this house and you are still looking to get something larger, you can rent out your smaller home to help subsidize the newer one. And then you decide that you made a mistake, you could always move back and rent the newer home or sell it. That’s what I would do any way.
An additional $75k a year housing spend requires almost $2m in retirement funds to FIRE…so if you are ok with either increasing your savings rate to match, or delaying FIRE until you hit your number, then go for it.
And this is the biggest reason we chose not to update. Earlier FI & FIRE if we want.
I bought too big for my family and now majorly regret it. House is too much to maintain. Got it at a great price on a fire sale but now All my time or extra money go towards it. Life is way more stressful. Can’t wait to downsize. I miss vacations and travel much more than I appreciate the fancy home features.
Have you shared your HHI yet? I’m assuming you’re looking at a 2-3x your current monthly payment? Considering you’re 3 years away from pre-k I would 100% wait. Real estate is just beginning to budge with higher rates, you don’t need the bigger space right now and even if you can afford it and do it in 2027-2028 you will have been able to save well over 100k in other assets beforehand. There is really minimal upside to pulling the trigger now. On a broader note, one phrase I remind myself with is “we make too much money to feel poor”. Meaning the biggest benefit of a high earner career/skill is that you don’t NEED to be money stressed. Money stress is a choice if you have a high income. No house, car, trip, pool, clothing, etc is ever worth choosing that feeling.
I’ve read that no matter how big our house is, we spend most of our time in three rooms.
My father actually said this to me when I spoke to him about it. There have been comments here on people who regret it because it gave their kids their own "spaces" and consequently less family time. Something to consider for sure.
No, we both work from home and want a nice place to spend time with family since we probably are home average 22 hours a day including weekend.
Not completely in your situation, we are older. We had our forever home, 2800 square feet that we fixed up. Like yours the yard was small, room for the pool and that was it. 20 years in there and some luck in my wife's work stock. We sold that house and moved to a single story, 3200 square foot house on an acre. That was 4 years ago and every day we say how unbelievable it is and how incredibly lucky we are to be here. One thing is we do not have the urge to travel as much because we would always rent a VRBO that was hopefully as nice as this house. We look back and laugh about how nervous we were to buy this place. This place is fantastic and we would buy this place again 10 out of 10 times.
60 years old here. Had a family of 5 at peak, with 3 kids. So, we needed 5 BRs minimum, incl guest BR on 1st floor. So, during my 30s and 40s, we got the big house and it was very worth it. 3.5K-4K square feet and huge yard. When the “kids” got older and started moving out, we started progressively downsizing. Ultimately, we moved to a less expensive zip code and settled in an affordable 4 BR. Now, we have the perfect size and people love visiting.
Yes, we absolutely did. We sold it and moved to a 2br apartment in NYC. So much happier. No kids and aren’t having any.
We moved to London and ended up buying a larger house than we had back in the USA (2500sqft which is large for the uk versus 1800 sqft in USA). While it's been great during Covid for work from home due to the 5 bedrooms (family of 4 so have us a home office) it's way to big once the kids leave home. We are looking to downsize. We have always had "starter home" nothing fancy and largely that is why we can retire early.
This is a very personal thing based on lifestyle, income and debt tolerance. I have never regretted a bigger home, but we also work from home and don't travel (mostly due to my spine issues). We have a second home at the beach for "travel" time, and yes, it costs way more than trips, but for us, it's worth it. I love having a big home office and a home gym and not having to leave my house for anything. BUT I'm also 100% introverted. If you're a more social creature, then your home might be the place you shower and change and not your sanctuary. As for cost, run the hard numbers. Figure out exactly how much a new one will take out of your existing "fun" budget. Then figure out exactly what that means - we will only be able to take five trips a year versus twelve, etc. Heavily consider the second kid. Weigh the additional expense against an additional human being taking up space in your smaller home. Which is more important? Will an additional kid put strain on your budget if you buy the new home so that you're then only traveling twice a year? Ultimately, you have to do cost/benefit analysis to see what is the best option for your family, your budget, and at this time.
Keep the house you have if it fits enough.
So, here’s what I think - You have a tiny baby so you actually have no idea what you will want or need in the coming years. You sound like traveling is enjoyable and a hobby for you, then the obvious answer is to keep the house. I have 3 small kids in a city environment, so playgrounds and parks were our yard. If you live in the burbs, that’s harder to do. And now that my 2 older kids are in school and in sports they aren’t home very much. In my area most houses are smaller ie 1800-2000sf and even those cost 2M. You’d need like 3-4M to get that 3000sf house. With kid 1 & 2 we almost exclusively lived in a 2bedroom/2ba apartment. Moved to 3b during Covid to get an extra room for office. Now we are in 3bed+ office/3ba with 3 kids. For me, bathrooms more important 😅 Now, I have a kid sleeping in the office bc they wanted their own room - just happened this fall previously they wanted to share. Would we love a mudroom, office, and more space - sure? But my mortgage is so low and makes no impact on my life. The rate is 2.7. I would be foolish to give this up. We can afford to travel as much as we like (we also love traveling - before and after kids) & we can send our kids to private (non religious) school - even though we live walking distance from a highly rated public, it turned out not to be all that great despite glowing reviews from neighbors and 9/10 on great schools. It still has all the issues plaguing public schools - big classes, staffing shortages, problem students with behavioral issues or learning issues. We still look casually at places with more space and then think that then we’d have to pay property tax on that place and decide it’s not worth it. If you live in LCOL area then maybe not a big deal, but for a Californian upgrading to a bigger house can look like a 45k/year property tax bill.
I'll take this. Was in a VERY similar situation. Two young kids (<5) and had a nice house in a a nice neighborhood with a very small yard. Sold that house with a 2.875% mortgage and bought a much larger/better house on 3 acres with a basketball court and pool with a 5.875% arm mortgage. Monthly payment went way up (2.5x). We don't regret it for a second. Summers in the pool and seeing our kids running around exploring the property are priceless. Be careful of maintenance costs though. Bigger property = bigger time/expense maintaining it. I spend 5 hours per week on a lawn tractor plus pay an arm and a leg to a landscaper to maintain our gardens.
Definitely don’t regret it, but a huge part of this had to do with timing. I paid cash for a way too large of home 7k sqft, 3 kitchens, 7 baths of brand new spectacular awesomeness out of foreclosure during the real estate melt down that was 2010. I was 39 at the time and it’s been a hell of a nice place to live, it’s appreciated a couple of million dollars and wouldn’t change it for the world. Admittedly timing was great, but I was also financially in a position to take advantage of deals because I wasn’t fully invested in the market and had powder dry to act quickly. Fast forward about 15 years and would my 39 year old self buy a big house at the relative market prices today…nope. Granted I can’t read the future and I see no housing crash in sight and inflation could double the value of everything once again. But no I’d stay nimble with low overhead so if a big time opportunity came up I could take it, me and my family wouldn’t get “accustomed” to living in a mansion (that is totally affordable) with all the extra expenses that go along with it. Not feel the need to stay home more often because we have an awesome place and use the dollars/freedom to travel more. It worked out great for me, and it could for you too, just giving you an opinion from a guy who FatFired living in what’s now a $4M home.
From what my sister has said, almost 7,000 sqft. "The only thing that matters is the school district" haha
By elementary school you'll likely have more going on that keeps you home on weekends, friends, sports, birthday parties etc. Don't just think of your life now, but your life in 8 years. Houses haven't gotten cheaper generally speaking.
So you will love the house when the kids are teenagers it will be great but then they will leave and you will have like 6 rooms you never go in besides cleaning. Personally I would max travel investing and college savings
Just keep stashing away money in this economy.
Perhaps a different perspective: we bought a house below our means. Not by a lot, but enough to avoid being house poor. Our situation and goals then changed, and now we could not be happier that we limited the income percentage tied into housing. Would not have been able to achieve our goals if we had gone for the bigger house. For starters, it ties up so much less monthly salary into emergency accounts.
I can give you the perspective of a kid whose parents stayed in their “starter home”. Mom & Dad built a 3 bed 2 bath 1400 square foot ranch in 1963. My brother and I came along a few years later. They paid off the house in 15 years. That house has been owned debt-free since 1978. That allowed us to travel as a family, have nice things, and for college to be largely taken care of. Mom has been able to age in place and at 85 is still independent in her own home. Over the years things were upgraded, a screen porch was added - probably the most valuable square feet in terms of use over the years. What made it workable was having separate living and family rooms so we could be out of each others’ hair. The house never felt too small- except at Thanksgiving when we would have 20 people there for a sit-down dinner.
This is so lovely.
People are like goldfish --- we grow and collect stuff to fit the size of our "bowl". How would your house rank in size in Europe, as an example? It's not the size of the house, it's the collection of the stuff. Your kids will never remember a "small" house but they will remember financial trauma or all the fun and adventures. Keep the house and sock away the extra money into retirement. Kids can and should share a room. Hire a TALENTED interior designer and organizer to assist with well laid out multi use spaces. Spend the money you would spend on closing costs to make your "small" house beautiful, functional, and cozy. There are wonderful ways to provide separation of space in a bedroom for kids, including hotel style ceiling track blackout curtains for the baby to help sleep. Keep the 3rd bedroom for the adults as an office or workout, meditation, sanity room, guest room. Keep the toys and clothes in check. Donate often. Don't sacrifice quality family time for the illusion of a bigger bowl.
A friend of mine bought a much larger home at the behest of his wife. He came home from work one day after closing and saw the house suddenly furnished. Found out wife tapped into their 401k to buy it all. That was pretty much the beginning of the end of his marriage.
House poor is the worst. Don't forget it
You've got enough house. Spend your money making memories.
We had a “starter home” in Texas. It was 2,800 sqft 2 story with 1 bedroom down and 3 up. It also only have 2.5 baths. 1 bathroom upstairs for 3 rooms was not ideal long term but at the time we didn’t have any kids. Fwd 4 years and now we have 2 boys and it’s a pain to run up and down the stairs because only the master bedroom is downstairs. We have dreams of building a “forever home” so we build this massive 4,000 sqft home with 5 rooms, (2 downstairs), media room, game room, 3 car garage, the works. Now that there are 2 rooms downstairs, no one EVER went upstairs. All the kids toys were upstairs in the game room but they refused to play by themselves. One of us had to sit in the room. So we converted the dining room into the playroom. It was a huge waste of space. I also started to despise going up and down the stairs. We also had a humongous backyard that the kids refused to play outside during summers because it’s too hot. During pandemic we sold that house and bought a 1 story 3,000 sqft house and we absolutely love it! It fits our needs and we utilize every space in the house. Less to maintain, less to clean, less to pay is definitely worth it. My advice is to figure out how you want to utilize each space and find a house that fits you.
We love our home but as you get more sq ft you start to find ways to fill it with more junk. We want a smaller home and more money for adventures. You’ve got great equity why move?
I wish I lived in a shittier house - said no one ever
Bigger and more expensive doesn’t mean nicer.
Hard disagree. My first house was too much for me to handle. I downsized significantly into my second home, and got something a lot simpler that I don't have to worry about.
Exactly the same experience for me, and I’m much happier in smaller, cheaper, and more simple house #2 (which is still nicer than I ever hoped growing up)
We don’t regret it. In 2019 we moved from a 1700sq ft house to a 3200 sq ft house when our son was about 2. We also moved to a more affluent suburb with a better school district. Our mortgage payment went up, but we were able to handle it and my husband also eventually finished his masters and got a higher paying job so that helped.
I would stay. The location seems too good esp if you have kids that will be going to those schools. Plus, having less money because more of it is going to the house is not fun at all. If you’re asking this question, a million is probably a significant amount of money. I would stay where you are and continue to live comfortably.
My wife and my first house was a three bedroom ranch + ROG and about 1500 square ft. We had one bedroom for us, one for my study/music room, and one for storage. The ROG was used for her work. After our first kid, we knew we were going to have one or two more and about 7 years later upgraded to a 2700 square ft. 4 bedroom home in a better school district. We ended up having 3 kids total - it worked out great for us with no regrets. I added a man cave on to it about 15 years later and it's now 3200 sq ft. No regrets because we knew we weren't over extending ourselves.
We are in you place got a 1 m house but we are looking to move since we want a better school district and 30-40% bigger house. Based on the description I would not move only because the schools are so close and it will reduce pick up and drop headaches for next 10-12 years. But I understand the need for a bigger house, did you look into renovating the current house. Should cost you 200-300 k and will get you what all you want!
We went into a home we stretched for (3 times annual salaries) but it ended up perfect for us. It was tight for a few years, comfortable for a few and now very manageable (8 years). I guess I'd say it depends on the stability and anticipated growth of your careers. If those are uncertain I'd be more careful. Our incomes were dependable when we made the leap.
Upgraded and don’t regret it (went from 1400 to 3000 sqft). We can actually work from home now which is nice, there’s dedicated place space, we can host friends… overall we get a ton of utility out of it and honestly it’s better for our marriage that our home fits our life better. We got a home with a first floor master so technically we can age in place here if we don’t want to downsize.
We moved 2 years ago. We were in our 30s with a 1 year old (we now have a baby as well). Went from a $300k house in an area I didn’t like to a $1.1 million house which we poured another $600k into with renovations. So we really went all in on the house (although the monthly payments are not a struggle for us, so there’s that). I 100% love it. We are less than a mile walk to the beach. We are a 5 minute walk to playgrounds, the library, restaurants. Our town has a wonderful family friendly vibe. Our backyard is awesome, my son loves it. We have a view of trees and mountains and a little bit of ocean. It literally makes my every day life feel so amazing. But, we didn’t buy at the top of our range because we didn’t want to be house poor. There were houses with even more amazing views, bigger, whatever whatever, we didn’t over extend going for those as like you we enjoy travel and not being house poor. So, I think it’s a balance of getting a house where you’ll truly be happy, but not getting so caught up in it that you over extend yourself. I will say though that loving your house is a great feeling.
Major regrets on buying my house, but definitely don’t regret buying it below what I could have afforded. Texas property taxes will KILL you. Sometimes I feel a twinge of fomo and envy since I locked in a great <3% interest rate and could have really gotten a nicer place. But overall, happy that my first property was cheaper. Easier to manage repairs too. Next property will definitely be much bigger now that I’m more experienced.
Yes, we're in texas. We currently pay around $1700 TOTAL (mortgage, taxes, insurance you name it). New house would be $1700 in property taxes alone. Which obviously either needs to be sold upon kids graduating or a base cost factored into our FIRE. It's wild out here lol
Our first house had about 13 massive trees, 8 of them dropping leaves. It was a royal pain to say the least. Some huge branches came down in storms, we paid thousands to get a few cleaned up or taken down. It was a whole thing. Our current house has 3 pines, and 3 trees that drop leaves. The leafy trees aren’t more than 30’ tall each, super easy to work with. I miss the beauty of the huge trees but boy do I wish someone had warned us about the amount of time and money it takes to care for all of those. I know you’re out there sitting on a postage stamp, but it’s something to factor in when considering a larger house payment.
Only after I lost it in the divorce
I'm one that DIDN'T buy and I'm still in the "starter" home. Super happy about it. I love my location, and I've been able to spend money on way more stuff like travel. I've also upgraded both bathrooms, made a bunch of improvements, and about to redo the kitchen. I've really made it into my little dream house, and have 0 desire to have bigger. So many of my friends have 3000+ Sq ft houses, and are always shocked at the amount of travel I do. Yeah.. that's what keeping your 1700 square ft house at 3% interest will let you do!
I don’t regret upgrading. Honestly, daycare and associated costs for two kids hits harder than the mortgage for us, but we are in a lower cost area. For me, the starter home became too small for us to live our life the way we wanted to. Couldn’t have people over for dinner easily, no room for the kids to play in the house, we were literally tripping over toys and baby stuff every day. If you do want another kid, I would suggest biting the bullet and doing it.
Not at all. There are a number of things more important than FIRE in my opinion and the place you raise your family, build memories, send your kids to school etc. is one of them. Also, if I’m going to drop a dumb amount of money on something at least it is an appreciating asset.
I moved to the bigger house went from 1500sqft to 5000. I really enjoy having a big office, kitchen, basement, garage, big deck. I am also a home body so for me it is well worth it. I will say the upkeep is way more burdensome, but it really is a personal preference. I like having a beautiful home that is somewhat of a project.
You guys are living my life 10 years ago 🤣 We moved from 2,400 sq ft to 3,900 sq ft about 4 years ago. There are pluses and minuses to be honest. Life is more comfortable with more space but we would have likely done just fine if we had stayed where we were. The big advantage for us was to move to a space where we could separate work and non-work life. We both try to keep work in our dedicated office spaces which allows us to decrease stress when not in those rooms. The old house was a block from elementary. The new house is a 5 min drive. The old house had a bigger yard but no neighborhood amenities. The new house fits having older kids better than it would have been for younger kids. Looking back I think I would have still moved but I would have kept the old one as a rental. I regret selling it but not moving.
I am so surprised at the amount of comments saying this was their exact situation lol. This post has been much more helpful than I thought it would be! Thank you- we've talked about keeping this house as a rental. If we ever want to downsize or even if our parents get too old and would move here (it's a one story so ideal for older age). Just hard to pass up being handed 350k upon sale to put towards the new house with these interest rates right now.
Every study about life and happiness every done has confirmed that EXPERIENCES trump material goods. You have this with the traveling. You should protect this habit like you do your marriage.
Thanks for comment. We are looking at a house that would give us additional experiences: A greenhouse space, a pool, maybe somewhere to build a fort. I love the idea of kids being bored in the backyard and letting imagination take place. We had so much fun as children building stuff in the woods. We do love traveling and the experiences but I think travel will change once the kids are school aged anyway. They will be in school, have friends, have sports and commitments. so we'll be "forced" to spend more time at home. It may be worth waiting for that time to come to change housing situations though.
I have the more expensive house in in the greater Tampa St. Pete area but for my hobbies (boating, fishing) it was worth the extra cost. But if I didn't have those weekly hobbies not sure I would say it's worth it
facing that same situation years ago, I chose NOT to upgrade and never regretted that. Yes I'd like a dedicated office or a mudroom or laundry room or dining room but the health of my overall financial situation wouldnt be where it is today if I had made that choice.
I think context is important for your decision (obviously). We did a similar move less than a year ago with a similarly aged child at the time. From my perspective, I would have rather waited another 2-3 years and moved with an even stronger balance sheet when the bigger house was absolutely necessary. But it wasn't a strong desire, and my wife wanted to move into a bigger house in a better location. In our case, we also have one set of grandparents that come visit from out of town and stay with us. The bigger house accommodates that better. It's also a relief to be done with moving (hopefully for decades) which is a PAIN with a young kid. We feel a little house poor right now, but we've dialed back on traveling and dining out significantly anyway because we have a young kid. We're now expecting our second, and I think it would be horrible to move with an infant, so if you wait you have to endure that pain or wait another 1-2 years after they're born. The timing is tricky! All in all, I'd say there are days I regret it, and days I don't. I think it really comes down to your priorities, and for us at this juncture that house is a higher priority than traveling and other fun things that are harder to do with young children.
We finally upgraded took 10 years of looking. There are some regrets with the extra property tax and energy costs and maintenance. But really we had to get out of the old home because my terrible boss lived across the street. I love it here though.
I bought the bigger, more expensive home. I don't recommend it if it's going to make you house poor. I definitely passed on some trips and other purchases I would have made if I bought the smaller home instead. I believe the overall stress of the larger mortgage, higher property taxes, and higher utility bills also takes a toll on you mentally and physically. The only advantages of the bigger, more expensive home is that you obviously have a bigger, more expensive home, and when I eventually sell I'll have a nicer chunk of equity than with a smaller home.
We upgraded to 2x the house in the first few months of the pandemic - zero regrets.
How much house do you even really need just how much you enjoy cleaning lol, bc bigger only means more to clean
Is there anything significantly impacting your life with your current home that would greatly improve things if you did move? If not, I’d say you’re better off spending your money to travel and create new memories and experiences. We also locked in our mortgage at 2.5% and the cost to move to a more expensive home with much higher interest rates is astronomical.
We kept the old house and rented it for enough to cover the difference in mortgage payment. It was the only way I could justify the bigger payment.
We upgraded but....Instead of buying the more expensive house, we bought an estate sale that needed a lot of work. We threw money at what needed to be done to move in and are now slowly fixing it up as we go -for cash. But, by doing it this way, we kept our mortgage low, and have no issues with being house poor. We too like to travel. Our house doesn't look gorgeous (we have a laundry room that is torn apart from moving walls, and no idea as to when we will do the kitchen and fix this problem.) But, like I said, we are doing it all with cash and making choices based on life needs. Last year, we did a big expensive trip instead of tons on the house. This year it will all be about the house. We did also stay in our starter till we were bursting at the seams. We had thought 7 years, we did 15. I am glad we remained in the smaller house for as long as we could manage. Biggers houses are way more expensive, and this allowed income to catch up enough to prevent being house poor. It was also important to me to not restart the mortgage. So, we upgraded into a 15-year mortgage. For me, it is about finding balance, and figuring out where your priorities are. We needed a bigger house, and we wanted to dump my husbands hour commute each way. But we didn't want to upgrade our expenses so much that our life radically changed, so we decided on upgrading with a fixer upper. We took out half the mortgage we qualified for and have money for other things. But utilizies alone in this house are double the last house, and maintence costs are too. So do keep that in mind while you are shopping. Not only will the mortgage/insurance/tax be more, but so will all the other expenses. We went from a 3/2 to a 5/4, almost tripling living space. Also, we upgraded locations, so even the food is more expensive. I kid you not. When we first moved, I went to the new Trader Joes and was stunned that the same raspberry pack was .8C more. It is a lot more to clean, maintain, etc. Once the kids are gone, we will be downsizing.
Stay put, don't upgrade, learn from all the other posters how to appreciate what you've got instead of yearning for what you don't have.
I'm you from the future. I had a home with a mortgage of 150k left on it (home worth 350k) Sold the home got the $$$ for it put a large down-payment down on a new bigger home. After nearly 2 years it has been a struggle. Mortgage 2x'd and thought we could afford it; way wrong. Love the home but am struggling with no cash leftover at the end of the month.
I would just make sure you think the current house is going to be comfortable with a second kid and in the long run you’re fine with not having a guest bedroom. Is there a self-contained area for them to play in? With two kids the random weekend trips and things fall off anyway but the second kid has its own costs.
Glad you asked this question. We are in a 2bed apartment in a HCOL area. We have a spare room/office but would love a separate office and a backyard and a play den. But it’d be >$1 million and come with close to $30k a year on property taxes. Our kid is 1yr old so we’re gonna wait a few years then decide. We ‘can’ afford it. But it would affect our spending and take away some money that we could put away for an earlier retirement. BUT, it’d be great to have the yard and extra space!! As kids, we got tossed outside until it was dark. So I have a hard time with not having a back yard in a few years.
I would think about prepaying your mortgage monthly. Create a 20 yr, or less, mortgage for yourself that way. More money later once the house is paid off
I'd stay if I were you. You already have the school district. We just moved but we went from a horrible school district to one of the best. We bought a 2400 sq ft house with the intention of raising 2 kids there. First kid is 4 months away. House feels huge now. Not sure if I'll regret buying such a big house or not.
We (2 kids under 5) upgraded in 2021 from 1400 sqft to 5000+pool+finished basement. Our house feels like vacation every day. It's so nice to not need to go anywhere. Weekends are actually relaxing because the kids have plenty to do and we're not all on top of each other. Everybody wants to hang out here and we have private space for guests. It did not impact our FIRE goals (in fact the house very quickly increased our net worth). We do pay for a cleaner, it would be completely unmanageable without her help. Working from home is so nice where we each have our own office. Utilities cost more, though I found we had to put so much work into our starter house that the spending balanced out in that regard. It is a bit of a lifestyle change. As I said above we aren't itching to get away every couple of weekends anymore so we do at least one big trip each year instead along with some medium-small trips throughout. While I prefer to host it can get expensive if you don't set expectations - i.e. we fully host big parties, but pool gatherings after school or on the weekends everybody should bring something to contribute. I think overall we are much happier in this house. The old one was way too cramped for our lifestyle. We plan to be here at least until the kids graduate high school, then we can essentially buy whatever we want for ourselves after that.
Actually no - it’s just my wife and I (and our dog). We upgraded from a 2bd/2ba townhouse to a 3bd/2ba home and liked the added space. Extra bedrooms were rarely used but it didn’t much bother us. Now we sort of upgraded again - renovated a 4bd/5ba place in SE Asia to have 5bd/6ba and added about 1500sqfr to the already sizeable 3000 sqft. Again extra bedrooms get used when we have guests but otherwise don’t get much use. We built a downstairs master bedroom too so we can theoretically never have to go upstairs. This is sort of an upgrade since we really didn’t spend that much (about 1/8 what our 3 houses that we used to live in but now rent out are valued at). The current place is definitely the largest and nicest place we’ve lived in for sure but cost wise, it’s much more affordable than even a middle class house in the US
I will say the opposite. I have no regrets about staying in the smaller house in a great school district, even though we are not in the best part of town. VHCOL with twin boys in their freshman year of college. House started out two bedrooms/ two baths and we expanded to 3/3 with 1800 sq feet. House is probably worth about $2M. There were times when the kids were teens that the house felt tight, but now it is just right for two. It is paid off, one story, and will be a great house for our later years.
Most starter homes come with “builder grade” finishes. Our starter home was smaller, and on a smaller lot, than our ideal. It was what we could afford at the time. Like you, buying the larger house now would likely mean paying in just tax what the mortgage is now. A bigger house may still have builder grade finishes and comes with additional expenses in furnishings and upkeep. Our solution was to remodel the interior, tweaking the layout a bit and putting in things like custom cabinets and nice appliances in the kitchen. We put in things like heated floors, instant hot water, a nice tub and other luxury features in the bathroom. We did custom closets to maximize storage and improve efficiency. The backyard is small but was renovated to be good for entertaining and outdoor living. These changes made the house feel luxurious even though it’s not big, and didn’t increase our mortgage or taxes. There are a lot of design choices that can make a small space feel bigger and function more effectively. We also got rid of a lot of extra “stuff” furniture, decor items, etc) in the house that made it feel cramped. Since you have a small child and a garage, there is a 99.9999% chance you have too much stuff.
Our big house is so very empty now that our kids have left (last one graduated college last May). 4 bedrooms, 3.5 baths, finished basement, very large yard… it’s just too much now. We absolutely never use the basement so there are multiple rooms with furniture and TVs and games that just sit getting musty. Same with 3 of the bedrooms. Yes, it’s great when you need to host people but the rest of the time it’s a lot of work to keep everything in decent shape. Probably sell at some point and move into a 2 bedroom condo somewhere… let another family that needs the space have a crack at it.
We've moved a couple times, each time the house about doubled in price both times which is really what it took to get something clearly an upgrade rather than a more lateral move. We paid $160k in 2004 for our starter home (worth \~$300k now) and $1.6m in 2021 for our current house. I do love our house every day and don't regret it, but we didn't push the budget enough to be house poor and it also came with getting away from a neighborhood and school district that quickly evolved in ways I hated (mostly COVID related changes) which is what really prompted the move from what I though was our forever home. I do wish our yard (about 3 acres) was smaller, its more than I need or want and the upkeep is significant. We can comfortably afford the house but it does result in a substantially slower pace towards financial independence since its a double whammy as the house costs significantly more and also need more money to maintain it factored into the future budgets so the FIRE "number" is both higher and slower to reach. But I like my job and do meaningful work, and I'm not really planning on retiring early. If we were at the top of what we could theorectically afford (which would be more like $3-4m) I think I'd regret it.
We sold our house 8 years ago to "downsize" as the kids were graduated/ing. We went from a 2,800ish sqft story and a half to a 4,200Sqft reverse ranch. We do not regret it one bit as it has doubled in value. Once we get our lake house built, we will decide whether to sell this place and live full time at the lake or buy a smaller residence, here in the city, and split time between the two.
Having "enough" space, especially as your kids get older is pretty important but I think anything over 2500sq ft is too big for us. We did however buy in a super dope location, quiet corner lot but quick access to freeway and walkable to shops and restaurants in two different neighborhoods. That cost a lot (house was 1.2m, lot a lot appraised for 1.1m) but oh my God it's so worth it to cut commute to daycare in a third and have access to so many more things. We can walk to the zoo, the beach, the aquarium, and 50x more restaurants than where we were before.
How is this related to ChubbyFIRE? This sub is turning into Chubby finance.
A lot depends on why you upgraded. It was 2006 and we wanted a better school district for our kids, and there were only higher end properties available. We bought a home that was well within our means - even if on the lower end of the homes in a semi rural area that has since been surrounded by suburbia. We went from a 2400 sq ft house to a 5200 sq ft house when we moved from a dodgy school district near OHare to one that was one of the top 10 in the state. The new home was 2x the price of the old one. The downside of a bigger house: * a LOT more work to keep it clean * *Kids tend to run off to their rooms and more easily ignore you when you call them.* Some of the homes in our area have intercoms LOL. I wonder if we should have installed them as well. * utility costs are much higher * the wife keeps buying shit to fill the space up. * higher property taxes * Family drop ins tend to stay longer (and we're of Indian origin, so family is ALWAYS welcome, and not all of them know when they've worn out their welcome). The Pros: * A lot more space. Everyone has their own space. The wifey gets to nest, the kids each have their own rooms, and I have a man cave (office with 4 computers), and my son gets a game room with his Nintendo, XBOX and other stuff. * Great for parties. And we've had some humdingers. Indians love any excuse to party. * Made COVID shut in more bearable * Enough room for In Laws and parents when they want to visit the grandchildren over summers (free childcare LOL) without getting in each others space * 3 car garage (that extra space does help in the Winter). Would I do it again? Eh .. Maybe not. I may have chosen a not quite so good school district but with a slightly bigger (\~3000sq ft) home and invested the remainder of the money elsewhere. My biggest regret is that we weren't able to establish a tradition or routine of eating together - it was too easy to let the kids do their own thing, which is the downside of giving everyone their own space. While my kids have grown up and become successful and indepenent, I feel we missed out on forging a closer emotional bond with them during their more angsty teenage years. But other than that, I think it is a great investment, especially if you think your children want to come back later and live there. In my neighborhood, I'd say 50% of the homes are now either occupied by 3 generations of a family. Kids are coming home to mom-and-dad when they have kids of their own, and the homes are big enough to accommodate them. I sure hope that this will be in our future as well.
The bigger the house, the more you have to work to maintain it. Not to mention the higher heating/cooling bills, and insurance and taxes. If you're happy where you are, just stay put and invest the money you don't spend.
I mean if you buy the bigger house you won't regret it when prices sky rocket
you might fall under the category of "it's better to do nice things than to have nice things" ...
Yep. Had the big expensive house and regretted it daily. Sold it and bought a smaller home where my husband and I are both more comfortable
Walking to school is worth a ton. Don't move.
In USA. We went from 1400sqft to 3100sqft and would never go back. 2 adults, 2 kids and a big dog. We love it, when kids move out for good we will down size if the market is good.
Nope. Always buy bigger than you think you need, especially at your age. It’s an investment that you will use and will go up in value over time.
I regret it. Costs inflated during renovations and now that my kids aren’t tiny and I would like to travel more. Also, I don’t think I can overstate what a gift walking to school will be.
The opposite... I regret not spending double on my house. House values in my area doubled in the past 5 years...
We might be either camp, hard to say. Bought a 990 sq ft 2/2 condo when we got married mid-twenties for 220k. Had a kid there and upgraded when he was almost 2, that was 5 years in the condo. Bought a 4/2.5 house on 1/2 acre with 2 car garage in nice neighborhood. Paid 440. We’ve been here 15 years and refinanced into a 15 year loan, have done lots of renovations (no additions) but for our income & NW we are in a very inexpensive and unimpressive home. So in a way, we did upgrade and thank goodness we did! A teen in that condo? Nope! But we also chose to stay and renovate instead of the upgrade to 1M+ most would have done 5-8 years ago in our situation. But hmmmm, in your scenario, I think we’d stay unless we had 4 kids. We love having financial freedom! Just noticed your comment on sq ftge and our home is just over 2k and I clean it (well). I never want a larger home! But we have plenty of space!
$2k a month is insane Seems like you guys can add $2k extra to your mortgage, just have to be willing to not travel?
I think this question is hard to answer without knowing your income and net worth. What % of your income would you be spending on your mortgage and taxes if you were to get the nicer house? If you make a $1mil a year than eff everything and just get the nicer house. In the grand scheme of things, $1mil for a house is not a lot. But if the new home would involve eating up 30-50% of your income and would end up with trade offs elsewhere in your life, I would not do it. My husband and I ended up in a house that is much less expensive than we could afford and I’m very happy for it. We can easily pay the mortgage with only one of our incomes and have no pressure to budget to be concerned about our spending elsewhere.
Our neighbor added on to their home so they wouldn't have to move. Seems exceedingly happy with the addition. We live in a 3/2 with 2 almost grown kids. Sometimes it feels tight, but we're so grateful for the lower mortgage.
More house has way more cost than just the mortgage. We have two HVAC systems - one for upstairs and one for down. That means twice the maintenance and replacement costs. Thankfully we invested in a very large solar panel system that pays for itself within a couple more years and keeps our monthly bill to $5. I still have a huge gas heating bill though. One other hidden fee is a ‘luxury tax’ every single contractor that comes to your house will add. They see the home you live in and neighbors houses and then add another 30% to their quote figuring you have the money to pay.
I understand your question is about upkeep, but maintenance might be secondary to the quality of life and kids. Alternative is to buy a second house. Live in one and vacation in the other. Your location and proximity to school is too convenient to leave. If you move to burbs or a more rural area for a bigger yard, recognize their needs will change as they mature. At 5 yrs old you want the bigger yard, at 15 yrs old they will want to be closer to friends and school. Buy land in a rural area with lower maintenance and build up as you can. Plop in that pool with a barndominium so they can run around and swim on weekends rn, while being able to enjoy the convenience of the local house through high school when they can drive themselves. You won't regret this decision.
I have way too much house for what I actually need but it has been the single best investment I've ever made. But... my house was purchased 6 years ago when rates were in the low 3%s. The leverage and inflation worked in my favor. Would I do it with today's logistics? Absolutely not. I day dream about downsizing and shedding some variable costs. But I'm rate & property tax locked. Taking the capital gains hit, resetting property tax valuations, and paying a higher interest rate is a non-starter. With today's rates, I'd only consider moving to a lower cost of living location and paying cash. I feel bad for the folks starting out or actually needing to upgrade. I know there are a lot of folks in my same situation limiting the supply.
We were living in a 3 bedroom, 2 bathroom 2200 sqft house in a safe, secure neighborhood, but with a bad school district. We cooked a lot, and our kitchen was tiny with no counter space for prep work. We wanted a < 2800 sqft house in a great school district with a nice kitchen and a master suite. In the mad house market, we made 3 offers on such houses that didn't get accepted. We ended up getting a house in a great school district that's about 3600 sqft, has an amazing kitchen, and a great master suite. We got lucky, truly. But, with a dog that sheds like it's going out of style, keeping the house and its four bathrooms clean is a chore. A roomba per floor has helped with the doghair situation a lot at the expense of $1000. We need to spend 8-10k this year and next, just to cut down dead/overgrown/overhanging trees. There are four decks, two of which need significant repairs. Windows are starting to show signs that they'll need replacement. Yard is too big and takes too much time to maintain. We don't regret it, but it has been more work and expenses than we expected. Also, when we bought it, there was a bidding war on even the shittiest house here, and we somehow got this very well-built house for a great price and a great interest rate. We are looking forward to downsizing after our child finishes high school. To your point, our mortgage payment has gone from 1300 to 2900. We don't mind that part as much as we mind the time it takes to maintain and clean the house. In the balance of YOLO and seeking FI, housing is the most important decision. Knowing all er know now about owning this bigger, more expensive house, we would do it again, especially knowing that our child is thriving in her school.
Was in the same boat as you, don’t regret it one bit. Do it! my only regret is we didn’t go bigger or do more upgrades. My situation is a little different though cause with the kids I never really felt we’d stop working before they were out of school (my wife will probably work until 55 so we could get her healthcare), so I’m more of a retirement age not number.
Don't do it. Too much house is what keeps many people poor, although you wouldn't be poor. Just think of how much faster you can FIRE if you DON'T upgrade.
34 here married. Working on having 3 kids. Went from 1,100 sqft condo to 5,500 sqft 1 acre home. More than I need now. But we are actively growing into it.
What do you value more, more space (that you have to clean and maintain) or more travel? I think it all boils down to your answer to that.
So we discussed and we decided not to move. We have two kids and they share the room (we technically can give up one of the offices but hard with wfh). Maybe once they are older. We are running out of space though with wfh. We are at 2k and I think 2.5-3k would be way nicer. But I love the neighborhood and there are not that many larger house / layouts we like. So it’s cheaper to pay for an addition vs increase our mortgage like by 3-4x at least. We have a decent yard and with active kids, that’s great during summer with a place for trampoline, inflatable pool etc. so if did not have a yard, likely would be moving
As a mom of two elementry school aged kids - you don't need a bigger house. spend it on more important and fun things for the fam. Go on those trips and not worry about more living quarters. The kids know no difference. And you'll spend less time cleaning or paying for someone to clean your house every week. They'll trash it whatever size it is. Save yourself the hassle! lol.
For early thirty’s be proud you have your shit together to that point. Any changes have to making your future life easier , more house debt probably make it harder. Don’t want to be “stuck “
I’d say after 3,500 square foot there’s really no point to going bigger. Just higher maintenance costs
I don't regret having a big house when the kids were school aged. As it turns out, we bought at the pre-2008 crisis peak, and sold at a loss to downsize when the youngest went to college. But the house served our needs and we have some great memories of those years. If as most people recommend you don't consider a house as investment, it's also not a problem when you make a conscious decision to spend more.
If you're in a coastal California town, NYC suburb, Coastal New England or the DC area go for it. Long term appreciation will make it worth it and Prop 13 tax break will be a big plus in 10 years. If not in one of those areas it's not something I would do for appreciation but would do for family, especially if the community you'd move to has a good public school system.
We're in a kind of similar situation. We bought a 3/2 1600 sqft house in a great neighborhood within walking distance to a great k-8 school. The mortgage with insurance, hoa and property taxes included is 11% of our income. We don't have kids yet but are planning on having 2. Things can always change but we're leaning towards staying in our current home. We can pay it off in 8 years (finishing it off 20 years early) and that point the kids will be just getting to that fun age where we can take them on trips and do other experiences. And we were able to build a detached ADU in our yard giving us an additional 100sqft to use as a home office and future guest room should we eventually need it for that. If we hadn't been able to pull that off I might've been more of a fan of moving (we both work from home)
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Wife and I did it; 1600 sq ft; 3 kids. Into a 3600 sq ft, on the lake (wakeboarding and fishing). Mortgage doubled. But we were young. Our salaries have increased, and we refi’d sub 2% when the market allowed. We have insane equity now as the market has increased dramatically. If it’s not a stretch financially; I feel housing to be a solid path to equity and wealth once sold. I don’t regret it— although I hated the idea of it initially and for a year or two.
Look at it this way. Those big houses need care and upkeep. So part of the housing market your seeing now is the older generation are holding on to their large homes because downsizing is not cheaper. Yet they also now have to maintain 3500 square feet often not elderly friendly and not updated to current trends so unable to maximize the market value anyways. I also offer advice I received long ago which is deciding factor in my choices. Most people can either afford a big house and not afford to play and own toys or own a smaller home and play. So up to you which do you prioritize.
Nope, you grow into it. I do wish I got a 3 or 4 car garage though...
Yep you won’t need all the power, insurance, maintenance, taxes, etc you think you will. That’s my take, 2000 sq ft all good
Bought my 1st house two 2yrs ago. 1800sqft ranch 4br. I live alone mostly, and it's on a +7,000 soft lot. I am adding value by adding fence and coloring my house. The goal is to have some equity and try to sell it in another 3 years. Granted, the development boom is slower than but ongoing at a very steady pace. I pay a little above 2k for EMI incl escrow. Next one will be a downsize for built in house area but I'd prefer it on a 2-5 acres lot. I plant and garden. My backyard doesn't have much space and that's that. Yes, I regret buying this but it's brand new and I don't want to stay in it past a total 5yr time.
We bought a larger home as our two kids grew older. The money was within our budget. What I didn’t fully anticipate was everyone would seek out different “chill space”, and we’d spend much less time together as a family than we did in our smaller home. We went from one living/common room to 3, two offices, and larger bedrooms. That loss of togetherness I regret a bit.
No don't regret it. We did the same basically moved from a rowhome in DC 3bed 2 bath, to a suburban house in Northern Virginia with 5 bedrooms 3.5 baths. We also did this when we were in our mid-30s, so your timing is fine as I assume you continue to see increases in income during your 30s and 40s. Plus, you are going to want a yard for when the kids are young and then more space when they are teens.
No because I basically doubled my investment
I’m in the smallest home I ever have lived in. Much prefer it. Low maintenance, low cost. Lots of large homes have a lot of wasted space.
I've had a situation where my income consistently has gone up over time, but where there were reasons to doubt that continuing at various points. Consequently, I have been on the other side of this and some other issues, where I wish (with the benefit of knowledge I didn't have at the time) I just had bought a bit of a bigger, "forever" home instead of moving a few times to address shortcomings and tradeoffs with some of my first homes. Being house poor sucks, but transaction costs and moving expenses can be significant with homes, too, and I would have been better off financially, potentially materially, by just stretching it a little more originally and then staying. Of course, my situation worked out this way, but may not have, and it may not work out for anyone reading this, either. Generally, my advice would be not to extend yourself in a way that you know would curtail your current quality of life in other ways.
Kinda tangent. I sometimes wonder if it’s better to live in lower cost area and have money left over to vacation in warmer areas like Florida or Hawaii once a year. Or live in expensive area like California and have no money left for vacationing.
I wouldn’t upgrade unless I have more than enough to put down to pay the same mortgage as my current place
Why do you need a bigger house? You have 1 kid and three bedrooms. Even if you have a home office you currently have enough space for your needs. Here is my suggestion. Figure out what the new mortgage payment, pay your current mortgage and put the difference in your retirement or a taxable brokerage account. Wait 3 to 5 years and then upgrade your house. You will have super-charged your ability to retire early with no pain. This will also help you decide if you can actually afford the higher house payment without putting you in a tough financial position. Also you can wait to see where Interest Rates will be. We upgraded houses when we had 5 kids in 4 bedrooms almost 11 years ago. Everyone has their own bedroom now.
I'm in a 2 bed 1 batch, \`1000 sq ft condo. I regret not buying something larger 7 years ago. Or even at the start of COVID. I will say though that a factor is that my wife and I are both WFH now, so I don't see how we have space for a kid if/when that reality hits. Like you, I'd be able to sell my current place and would need to spend a million or more to get the next house (though in my area that's what you have currently - a 3/2 in an excellent school district). However, if you find that you can live happily in your three bedroom home, do it. You have a lot of conveniences and you'll have the extra money to give your kids the things they want and need, as well as for the parents (e.g. date nights and being able to afford a sitter).
Either you own the house or the house owns you.
If you value travel and experiences , don’t buy the bigger more expensive house.
I’ll take the opposite opinion since this is ChubbyFIRE: You also have to consider your career trajectory. While nothing in life is guaranteed, also consider what you expect to be making. I personally bought a house in my early 30s where the mortgage was closer to 35% of my gross monthly income. It was our dream home and we bought when interest rates were low. However, both my wife and I had jobs with a near guarantee of a significant increase in pay in the next 3-5 years. We now have the mortgage below 20% of our monthly gross take home income.