When Joeanne got divorced after 18 years of marriage, her primary focus was shielding her two teenage daughters from further upheaval.
“I knew the girls would be sad, and I thought one of the things that would upset them the most was having to move to a new school,” recalled the New Jersey mom, who, like others I spoke with for this piece, asked for anonymity out of privacy concerns.
To buy out her ex-husband’s $150,000 share, Joeanne refinanced the mortgage. Her monthly budget became razor-thin. She put off cosmetic home repairs, and scaled back family vacations.
“It was tight. I didn’t ever really have a lot of extra discretionary money,” she said.
Another woman, who lives in Baltimore, said she felt she had no choice but to keep the house after her nine-year marriage ended.
Soon after she separated from her husband in 2018, her parents, who lived close by, decided to move out of state, and she suddenly found herself without the child care help she had been counting on for her 6-year-old daughter and 3-year-old son.
The bad news kept coming. She found out that her ex had stopped paying the mortgage before he moved out, causing the lender to start foreclosure proceedings.
She scrambled to find a full-time job and ended up filing for Chapter 13 bankruptcy to save her home, which had a monthly mortgage of about $1,400.
“The decision to stay was because I had nowhere else to go,” she said. “I wouldn’t have been able to find anywhere so affordable.”
She didn’t have to buy out her ex, but she did have to refinance to get his name off the mortgage. That increased her monthly payment to $2,300.
“If it wasn’t for my children, I probably would have moved,” she said.
These women struggled with what often becomes the most consequential financial question facing a couple when they divorce: Sell or stay?
When you’re dividing up marital assets during a divorce, fighting to keep the family home is often the costliest mistake a person can make, according to Hillary Moonay, a partner and co-chair of the family law group at the Pennsylvania law firm Obermayer.
For many homeowners, their primary residence is their single largest asset. Federal Reserve datashows that home equity values continue to climb for property owners, with the median net housing value of a U.S. home rising 5.1 percent from $218,900 in 2022 to $230,000 in 2025. The mean net housing value increased by 4 percent between 2022 and 2025, from $367,000 to $380,400. This trend has been occurring as inflation has risen. Inflation hit 8 percent in 2022. It dropped to 4.1 percent in 2023 and continued to fluctuate in subsequent years, and rose to 3.7 percent in September from a year earlier.
Although a primary residence remains a major store of wealth, home equity has been steadily declining.
The share of mortgaged residential properties considered “equity-rich,” where loan balances are 50 percent or less of estimated market value, dropped to 41.1 percent from 43.3 percent in the previous quarter and 47.4 percent a year prior, according to Attom, a property data analytics firm.
Moonay said it’s not always a bad idea to keep the house. However, the problem is that many people view the house only as an asset.
“But it really can be a liability,” she said. “It’s not just the mortgage, utilities, and taxes. It’s the repairs, landscaping, and unexpected maintenance that come along.”
Buying out an ex-spouse usually requires refinancing, which often increases monthly costs on a newly reduced single income.
Worse still, spouses frequently trade away tax-advantaged retirement accounts, such as a 401(k) or IRA, or cash reserves, often leaving them with a weakened safety net, Moonay said.
“If they’re going to keep the house, which is usually the biggest, if not one of the biggest assets, they’re going to be giving up other things,” she said.
In one case, involving a couple with joint custody, both parents fiercely wanted to keep the home because it was located right around the corner from the husband’s parents, who provided essential child care.
The husband was the primary wage earner and could afford the mortgage. But the mother wanted the house so badly that she was willing to give up every other marital asset to keep it. The wife’s attorney eventually persuaded her to take cash rather than be trapped in a house she couldn’t sustain over the long term.
Moonay said clients frequently ignore her warnings about holding on to their existing home.
“They’re not thinking ahead,” she said. “I have clients come back later, like when they’re wanting to modify child support, and they’re like, ‘Oh, you were right, I should not have kept that house. It’s just a money pit, and now I’m going to have to sell it because my alimony is ending.’”
There are good reasons for keeping the family home when a marriage breaks down, according to Harvard Business School faculty member Christina Wing, since it offers stability for the children.
“I’m a big fan of not disrupting children,” Wing said. ”If it’s on the margin, like a little bit better to sell the house versus keep it, then I’d keep the house for the kids.”
But Wing, author of “Unspeakable: The Taboo Topics We Avoid and How to Talk About Them,” said she sees many women give up alimony or portions of child support to keep the house.
“If you’re getting divorced and you have kids, you should always put the kids first,” she said. “But putting the kids first isn’t something you can do if you go into debt in an unaffordable house because then you’re going to end up with nothing.”
Before deciding whether to keep or sell the family home, Moonay and Wing suggest taking the following steps.
Run budget projections. Think about how going from two incomes to one will affect your living expenses over the long term. Project your income, any alimony, and child support over a three- to five-year window, Moonay recommended. Can your single income cover 100 percent of the mortgage, property taxes, insurance and home maintenance?
Hire an accountant. Spread out what it looks like to actually keep the house for five or six years, Wing suggested.
People often go into debt trying to maintain their pre-divorce lifestyle. Or they overindulge their children because they feel guilty about the divorce, or they are trying to be the favorite parent.
What if you didn’t work outside the home, or only worked part time?
“If you’ve been a stay-at-home mom or dad and you’re trying to re-enter the workforce, take care of your children and pay for a house you can’t afford, you’re never gonna be afloat,” Wing said. “You’re gonna be drowning one year at a time.”
Wing suggests putting off selling the house for a few years, and splitting the costs.
“If you have children and you want to have a divorce with a decent outcome, you need to approach it as a win-win, not a win-lose,” she said.
Weigh other assets against home equity. If you agree to let your ex keep $100,000 in a retirement account while you get the $100,000 in home equity, you might not be getting a good deal. It’s not necessarily an equal trade-off.
To access home equity, you have to either sell the house or borrow against it, which means taking on debt.
With the house, “a lot of your wealth is stuck in an illiquid asset,” Moonay counsels clients. “It could appreciate, but it’s not making money in the market. You can’t easily pull money out of it. People don’t consider the opportunity costs.”
Giving up a 401(k) or IRA to keep home equity often leaves people “house rich and cash poor.”
Consider the consequences of refinancing. With interest rates higher than they were a few years ago, replacing a low-rate mortgage can significantly increase your monthly housing costs.
Don’t let your emotions override the math. Sometimes it’s not even about the house. One spouse just wants to stay out of spite.
“Many things in divorce are emotional, not financially driven,” Wing said. “Keeping the house feels like saving face, like ‘I got the house and he/she is in a crappy apartment.’ It feels like the person who keeps the house has the control.”
Moving is hard in the best of times. Making that decision during a divorce, especially when children are involved, can be overwhelming. But if keeping the house requires sacrificing a critical safety net, straining your budget, or drowning in debt, sell.
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