(ok, my old car goes to the junkyard, but if it had payments...)
You want to get out of one payment before you get into another one.
If you do not you end up with 2 payments. Even if you can afford it life gets tougher to feel free in.
The one house eats much of your free income. If you only had one house payment you would feel free to go to the movies, eat out, maybe even buy a new car. But when you end up with 2 payments all of your free money is gone.
It is possible to be foreclosed on 2 houses if you end up with both and can not afford to pay for 2.
If you can not afford 2 houses and do not want to rent one out sell the old then buy the new. Otherwise your finances will not be as liquid as you want. They will be frozen by both payments. It can take months or years to sell a house. You do not want to risk that.
That's a good place to start in answering your question.
If you need to sell first , do you have a place to stay while the new home is being constructed?
Most people would have greater peace of mind by selling the home first, then beginning construction. The only obstacle would be finding a place to live short term while the new home is being built
debbie Rose'Prudential NJ Properties
What will you do if your current home sells and your new home is not complete? Building could be 4 to 6 months or more. What will you do in between the sale and completion of the new house?
Lots of things to consider. Look at all you options, needs and finances to figure out which is the best way to go.