Moving Up Can Cost You

Move-up buyers, beware: According to a new study by Zillow, selling your home and moving on to a larger one could cost you—and probably more than you’re expecting to pay.

According to the study, households moving from a two-bedroom to a three-bedroom home in the same zip code can expect to spend an additional $447 per month on their mortgage—more than $5,300 extra every year.

The average additional per-month cost changes by house size, the study found, so moving from a one-bedroom to a two-bedroom adds $192 per month, while a three-bedroom to four-bedroom move means $614 more per month.

Some markets were, of course, higher than this average, with San Jose, California, coming in with the highest costs for move-up buyers. Moving from a two-bedroom home to a three-bedroom one in this city costs a household $2,224 in mortgage payments every month.

San Francisco, Los Angeles, and San Diego also came in well above average in move-up costs, while cities like Cleveland, Philadelphia and Indianapolis were much more affordable for move-up buyers than the national average.

“Those in hot, coastal markets could expect to spend upwards of $500 more per month,” the report stated. “In the notoriously expensive California markets of Los Angeles, San Francisco, and San Jose, high and rapidly growing home values likely weighed heavily on the cost of moving up. Moving to a 3-bedroom home from a 2-bedroom home in these areas added between $1,033 and $2,224 to the average monthly mortgage payment—an additional $12,396 to $26,688 per year on mortgage payments.”

In Cleveland, moving from a two-bedroom to a three-bedroom home costs only $74 more per month, and in Philadelphia, that number is just $77.

“In 24 of the 35 largest U.S. metro markets analyzed,” the report stated, “move-up buyers looking to upgrade from a two-bedroom to a three-bedroom home last year could expect to pay a mortgage premium that was actually less than the national average for the same upgrade. “

Most of these more affordable markets were in the Midwest, South, and Southwest, allowing families to “stretch their dollars further,” the report suggested.

To see more detailed move-up costs, broken down by location and home size, visit Zillow.com.