When would it make sense to upgrade home?

[Joseph Henry]

I have an existing home valued at around 800k with 45k left in the mortgage. We have been looking to buy a newer and bigger home for the last year but due to the tight inventory, could not find a home that has everything checked. Even if an odd home hit the market, the listing price is exorbitant and the mortgage rate at 7% does not help at all. With all said and done, we could not find a home in the 1.5 - 1.6M range. The monthly payment would be north of $10k, with taxes and insurance included. 

Our idea is to rent out the existing home. The rent would partly cover the new home but I am not convinced on the ROI with the majority of the payment going out to the interest.

I want to hear from fellow BiggerPocketers if they recently upgraded their home. If so, how did you do it and are you happy with your decision? If you considered and backed out, I want to hear as well. When would it make sense to upgrade the home, assuming you can afford a 10k payment.