As your life changes, your needs change too. One major question may arise: Should you expand your existing home by building a second story, or is it time to move to a larger house altogether?
This decision is more complex than ever. Rising interest rates, fluctuating home prices, tight inventory, and increasing construction costs all play a role in determining what’s right for your situation. But it’s not just about money, it’s about lifestyle, long-term goals, and how you define home.
This blog will guide you through the engineering and architectural demands of a second-story addition, the costs of building in the current market, and the pros and cons of moving vs. remodeling. Whether you dream of a bigger primary suite, more bedrooms for the kids, or a dedicated home office, this decision requires careful thought, and we're here to help you think it through.
For many homeowners, especially in urban or built-out areas, expanding up is the only realistic way to add square footage. Adding a second story means you get to keep your location, retain your hard space, and avoid the hassle of selling and buying. It’s an appealing option for people who love their neighborhood, have built equity in their home, and simply need more space.
Adding a second story isn’t just stacking another level on top of your house—it’s a complex process that requires structural reinforcement, design planning, and careful permitting. Before anything else, a structural engineer must assess your existing home’s foundation and framing. Most single-story homes weren’t originally designed to support a second level, so your foundation may need to be reinforced or even rebuilt in sections. Footings may need to be widened, load-bearing walls and beams must be upgraded, and shear walls or steel columns may be required to handle new vertical loads and seismic forces.
An architect will create plans that integrate the new second story into the existing footprint. The design must consider roof removal and reconstruction, stair placement, second-floor layout (bedrooms, bathrooms, office, etc.), and aesthetic continuity with the lower level and overall curb appeal. Many homeowners use the opportunity to update the entire home’s exterior or rework the flow of the first floor to match the new upper level during this time.
Depending on your city or county, you’ll face height restrictions, setback rules, and floor-area ratio limits. Local planning departments in cities like Los Angeles or San Francisco are often strict about neighborhood consistency and privacy concerns (such as overlooking neighbors’ yards). You’ll need structural plans, engineering reports, Title 24 energy compliance (in California), full permit review and inspections, and time. Especially in Los Angeles, you should be prepared for a months-long approval process before you can break ground.
Construction costs spiked during COVID-19 and have remained high due to labor shortages, supply chain volatility, inflation in materials, and the increased demand for construction. On average, adding a second story can cost between $500 and $600 per square foot, depending on complexity and location. That cost doesn’t include reconfiguration costs for the existing home, which can run around the same $500 - $600 per square foot. This also doesn’t include temporary housing or rental costs if you need to move out during construction (which is often necessary for major projects like this).
So, how do you choose what is right for your family? There are plenty of reasons why adding a second story is a great option. You get to stay in a location you love. You’ve already built community ties, love the school district, or have a walkable neighborhood. Staying put allows you to enhance your home without uprooting your life. You can customize it to your lifestyle. Unlike buying a new house, you get to design your second floor from scratch, the number of bedrooms, bathroom placements, home offices, reading nooks, or even a rooftop deck. The addition will increase your home’s value. Square footage equals higher resale value in most markets. A second story can dramatically increase your home’s worth, especially in high-cost areas.
On the flip side, there are some reasons why adding a second story might not be the right choice for your family. Of course, cost is always a factor. Even though you’re not buying new land, costs for engineering, design, and materials add up fast, especially with today’s labor shortages and inflation. This is a major construction project. You may need to vacate the home for several months, deal with noise and dust, and live through a significant disruption. Depending on your existing home, you may come up against structural limitations that won’t allow you to build what you envisioned. Some homes simply aren’t suitable for a second story, especially older homes with weak foundations or restrictive zoning. And while you’ll get more living space, your yard, driveway, and garage remain the same. If outdoor space is a priority, this option doesn’t solve that.
The other option is to sell your current home and purchase a larger one that already meets your needs. But is that the better choice for you? Let’s explore the pros and cons, starting with the current market conditions.
Interest rates remain relatively high in 2025, hovering around 6.5% to 7% for a 30-year fixed mortgage. This impacts buying power significantly—what could buy a $1.2M home at 3% interest in 2020 might only buy a $900K home today. Additional considerations are that inventory is tight, especially for move-in-ready homes in desirable neighborhoods, prices are stable but still elevated in most metro areas, and competition remains fierce with most homes selling for well over asking, especially if they are in a neighborhood with good schools, have modern layouts, or updated finishes.
The pros of moving into a new, larger home are plenty. You will get an immediate space upgrade. No waiting months for permits and construction—you move in with everything ready (or at least nearly so). You will most likely get some new modern amenities. Newer homes often come with larger kitchens, open layouts, energy-efficient systems, and smart home integrations. In addition to more interior space, you might gain a bigger yard, a three-car garage, or more storage. Forget dealing with architects, contractors, inspections, or unexpected delays, no construction equals no construction-related surprises.
However, making this choice comes with some compromises. Unless you’re paying cash, today’s rates could increase your monthly payment by hundreds or thousands of dollars compared to your current mortgage, depending on the current interest rates and deposit requirements of your loan. If your current home has appreciated significantly, you may owe capital gains tax. You’ll also face higher property taxes on a more expensive home. Moving costs and realtor fees can be upwards of 6%, add in moving truck expenses, staging, inspections, and closing costs. These fees can eat into your budget fast. And of course, there is always a slight emotional cost. Leaving a home you’ve personalized, where your children grew up or memories were made, can be hard, even if the new house is “better.”
So what should you do? There’s no one-size-fits-all answer. Here are a few questions to help guide your decision. Do You Love Your Neighborhood? If yes, staying and adding a second story might be more rewarding than gambling on a new location. Is Your Home a Good Candidate for Expansion? If your structure is sound and zoning permits it, you’re in a good position to build up. Do You Have the Budget and Time for a Major Renovation? If not, moving may get you what you want faster, though at a potentially higher ongoing cost. Are You Emotionally Ready to Move? Sometimes it’s about more than money. If your heart is tied to your current home, expanding might be the right call.
In 2025, adding a second story and moving to a larger home come with challenges, but also powerful rewards. Expanding your current home gives you control and continuity, while moving offers convenience and a fresh start.
Ultimately, the best choice depends on your financial situation, lifestyle preferences, emotional attachments, and long-term goals. Consult with an experienced architect at Ballentine Architects Studio to get a realistic view of what’s possible.
Whatever you choose, you’re investing in your quality of life and your future. So make the decision that brings not just more square footage, but more joy, ease, and alignment with the way you want to live.