I’m 44 years old, have 3 kids and it's been 1 year since I lost my $120K/year tech job — should I start thinking about selling the house?

How much will selling your house really save you?

If you're hoping to sell your home to shore up your bank account or cut your monthly bills, it's worth asking what savings you'll actually realize.

It's true home prices are up in many areas, so you may be able to cash in on equity. However, if you're buying another home, you'll also be paying those inflated prices. Worse, if you got a fixed-rate mortgage during or before the pandemic, you likely have a rate of 4.00% or less. If you sell, your new rate can average more than 6%. Even if you downsize, your payments may not fall much.

You likely won't be able to qualify for a mortgage when you're unemployed either, so you could be looking at renting instead of owning. Sadly, rent has increased 30.4% nationwide between 2019 and 2023, and Zillow reports it's outpaced wage growth in most major metro areas.

Trying to rent a place big enough to house three kids may not be affordable or even possible, especially if landlords are wary of offering a lease to someone who is jobless. You could very well end up worse off, struggling to find a place to live at all and paying as much or more than you were before.

Now, if you owe $350,000 on a home that you bought a decade ago that's now worth $1 million, that outlook may be a little different. You could sell, pay off your remaining loan and have plenty of money to rent or buy someplace cheaper.

But, unless that's your situation, you could really benefit from running the numbers and finding out if selling and renting or buying a new place is actually going to reduce your costs.

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Can you move for a better job?

While selling your house to free up some cash might not work out, moving to take advantage of a better job market is another story.

New tech meccas are springing up in unexpected places, with CompTIA’s State of the Tech Workforce 2024 report showing the biggest projected change in tech occupation growth in Utah and Wyoming between 2024 and 2034, while Texas and Florida saw the biggest net tech employment job gains in 2024.

If you're currently living in a high-cost area in the heart of the technology industry, like San Francisco, moving to an up-and-coming locale could give you more opportunities to break into new markets with increasing demand and less competition — as well as the chance to relocate to places where housing costs are much lower.

Salaries are becoming a lot more competitive in these locales as well. While California's average tech salary fell by 3.3% between 2022 and 2023, tech salaries in Utah rose by 11.1% during the same period. Utah's average tech salary is now $120,738, which isn’t too far from the average $121,047 tech workers earn in California.

Opening up your job search to more distant places could very well get you back to work much faster than staying put — and chances are good you could buy a much cheaper house after you move, especially if you have a pay stub in hand.

Can you afford to keep the house?

Of course, there's one last question to answer — can you actually afford to keep your home? If you can't cover the costs, you'll need to sell despite the consequences, as foreclosure would be worse.

Don't jump into listing your home, though. First, talk with your lender about hardship solutions. They might be willing to work with you to put payments into forbearance or to create a payment plan. You can also look into renting out your home. If you can collect enough rent to pay your mortgage and afford a cheaper rental elsewhere, that approach may be ideal.

If you have a good amount saved in a retirement plan, borrowing against it to help keep your home is also an option — but a very high-risk one, as you could end up losing your house and your retirement funds if you don't get a job quickly to start paying the bills and repaying your 401(k) loan.

Ultimately, your best course of action could be focusing on expanding your job search, either to new markets or even to other industries — even if you have to accept a pay cut.

There are few good solutions to finding a new place to live without income. Selling a home that you have a low-interest mortgage on means giving up a valuable asset only to enter a pretty rough housing market at a time when your unemployment puts you at a disadvantage. Unless you have a ton of equity and can pay cash for a new, smaller place, selling without a fool-proof plan may be unlikely to help your finances in the long run.