Buying More Space: When Upsizing Makes Sense

Whether your family is growing or you simply want more space to entertain, you may be contemplating moving to a larger home. But along with extra space comes extra maintenance and expenses — including some that are not immediately obvious. 

If you’re thinking about buying a bigger house, we’ll help you decide whether it truly aligns with your long-term goals or is just an emotional reaction to a short-term need.

First-time buyers don’t always think about kids when choosing a starter home. At this point in their lives, two bedrooms are plenty, a small yard is fine, and there’s no need for a rec space where teens can hang with their friends. But as families grow, starter homes seemingly shrink. Each kid wants their own room instead of sharing bunk beds and a single bathroom is no longer practical. And more outdoor space promises wiffle ball in the backyard or basketball in the cul-de-sac. A finished basement offers room for hosting sleepovers.

When moving with children, it’s also important to consider the school district and neighborhood. If a larger home in your current school district is not in your budget, is it worth it to move to a bigger house you can afford, even if the schools aren’t great? Sometimes living in a smaller home in a great district, where kids can ride their bikes and play in parks, has bigger benefits than extra space.

Many people downsize in retirement for reduced maintenance and to be free to travel, but some actually want more space to stretch out since they’re finally home to enjoy it. Seniors might also buy a bigger house to host adult children and grandkids, especially if they live out of town. A larger kitchen offers more room for hosting family dinners, and extra bedrooms make it possible for everyone to stay there rather than a hotel when visiting. And looking forward to the future, retirees with bigger homes have space for a caregiver to stay if needed as they age. 

One major factor to consider when upsizing is long-term expenses. If you have enough retirement savings to afford a larger home without taking away from current and future healthcare costs, it may be in your budget. A fixed income without sufficient savings, however, could stretch you too thin. You’ll also have to consider down payment possibilities. 

If you live in an area where home values have dropped or haven’t increased much since you bought your home decades ago, selling it may not result in a large enough profit to upsize. Higher taxes, utilities, and landscaping costs (remember, you may end up not being able to take care of an expansive lawn) could push your expenses over the edge. 

Make sure to discuss the implications of buying a bigger house with your financial advisor before making a decision. A knowledgeable realtor will also be able to fill you in on maintenance costs for a larger home in the area you’re considering.

If you work remotely, and especially if you and your spouse both work from home, moving to a larger home may be justified. Whether it’s an extra bedroom, a converted attic, or a corner in a finished basement, a designated office area vs. the kitchen table can make it much easier to focus on work.  

If you are self-employed and your home office is used exclusively for business, you may be able to deduct a portion of your home-related expenses, such as mortgage interest, property taxes, homeowners' insurance, and utilities. As of 2018, however, you can no longer deduct office space or expenses if you are a W-2 employee. But tax laws change often, so be sure to check with your tax preparer.

Upsizing your home comes with considerations beyond kids, work, and retirement. You’ll have to figure out if you’ve owned your current property long enough to make a profit. Conventional advice says you must live in a home for at least five years to see enough equity for a down payment on a next home – but that is based on the 6.5% appreciation that was typical in the past decade. In 2024 and 2025, home appreciation slowed to less than 5%. While values are still going up, you may need to hold on to your property longer to build the same amount of equity you might have accumulated more quickly a few years ago. Your real estate agent will be able to tell you what your current home is worth, and whether or not it makes sense to make some affordable updates to increase its value. 

Selling a home too soon can also saddle you with a big tax bill. A large profit from a house you’ve owned for less than two years could mean having to pay capital gains tax. It’s best to check with your real estate agent or accountant about current tax laws.

St. Louis homes are still in high demand, so you will have to act fast once you decide on buying a bigger home. In addition to your home’s appreciation, here are other financial considerations to think about before beginning your search:

Mortgage rates. Today’s mortgage rates are above 6% and are not expected to drop much by the end of the year. If you are currently locked into a better rate with your current mortgage loan, you’ll have to decide if upsizing your home at a higher rate will fit your budget. 

Property taxes. The average St. Louis county tax rate is 1.225%, which means a more expensive house equals higher taxes. 

Insurance. Square footage, special features, and architectural style are all calculated when insuring your new home, so expect to pay more than what you are paying now.  

Utilities. Unless you’re moving from an older home that wasn’t well insulated, it will probably cost more to heat and cool a larger house. You should be able to see average utility costs for homes in their listing information. 

Maintenance. A larger footprint means a bigger roof, multiple HVAC systems, more landscaping, and more general upkeep. That can all add up to more time and money.  

Resale value. Smaller homes appeal to a broader market, often selling faster due to affordability and lower maintenance. Large homes have a smaller pool of buyers, and therefore don’t tend to appreciate as quickly. For this reason, it’s important to determine how long you plan to stay in the bigger house — and make sure you won’t get tired of the extra costs and upkeep two or three years down the road.

Outgrowing a home can make it really easy to take the leap to a larger one – and that’s fine, as long as all factors have been considered first. Budget, space, upkeep, and what’s best for your family should all be factored in before making a decision. By working with a real estate agent at Berkshire Hathaway HomeServices Select Properties, you can be sure to find a home that meets your needs and goals. Contact us today to get started.