(MONEY Magazine) – The description in the multiple-listing guide reads like a dream: a spacious four-bedroom house in Plymouth, Minn., a western suburb of Minneapolis, for $125,900. But as soon as Steve Fedie, 34, a high school marketing teacher and football coach, and his wife Wendy, 32, pass through the front door, all hope that their nearly two-year house hunt might finally end comes crashing down. ''The rooms are so small,'' laments Wendy, taking a quick tour of the first floor. Then, turning to real estate agent Jeff Martineau, 29, she asks: ''You sure this house is 2,000 square feet?'' Before Martineau can reply, Steve, a powerfully built man, makes an answer unnecessary. Says he: ''No way I'd trade our house for this one.'' As the couple get back into Martineau's car this sunny June afternoon, ready to inspect still more houses, Wendy lets go a long sigh. ''I've never felt so frustrated,'' she says. ''We can find cheap houses we don't want and expensive houses we can't afford. But nothing in the middle. I'm beginning to feel there's no place for us.'' Steve and Wendy Fedie long to join the growing ranks of homeowners who are taking advantage of lower interest rates and growing equity in their homes to trade up to a roomier, more expensive house. It's not an exclusive club; thousands join every day. Of this year's total house sales, which are expected to set a record for the decade at 4.5 million, Richard W. Peach, an economist for the National Association of Realtors, estimates that fully 70% will be so- called trade-up sales. But though the Fedies have already traipsed through at least 35 houses since the fall of 1984, they have yet to find the one to convert them from shoppers to buyers. The Fedies confess that one reason for their prolonged house hunt is that higher demand for houses has given prices a kick, and they are unsure how much house they can afford. Given their combined earnings of about $40,000 a year and the gain they expect on the sale of their present house, which has increased in value from the $75,000 they paid for it in 1979 to roughly $113,000 now, the couple should be able to trade up to a $130,000 house. Still, they are worried that jumping from their current $56,700 mortgage to one of $90,000 or so will overextend them. ''When we first moved into this house,'' recalls Steve, ''we stretched ourselves to the limit.'' Then, thinking of the couple's two daughters, Kelly, 5, and Megan, 2, he adds: ''Our kids are at the age where things are going to get a lot more expensive.'' Such apprehensions sometimes make Steve less enthusiastic than his wife is about moving. He has been concerned lately about adding systematically to the family's modest $1,500 savings cushion. But Wendy, who spends much more time in their somewhat cramped home, is confident she will overcome her husband's reluctance. ''He'll come around. He just needs a push sometimes,'' she says, giving Steve a playful but firm shove. Before the Fedies make a move, however, they want to explore all their options. They have already rejected some, such as adding to their present house. But they are still wrestling with others, such as whether to buy an existing house or to build a new one. On that score, though, at least one question is already settled. Says Wendy: ''We're not first-time buyers looking for the thrill of fixing up a house. We've been through that already.'' Right now the Fedies live 15 miles west of Minneapolis in Wayzata, a quiet suburb that hugs the shores of 23-square-mile Lake Minnetonka. Wayzata is perhaps best known as the exclusive retreat of such family food dynasties as the Pillsburys and the Crosbys (of General Mills), whose estates overlook the lake. But within an easy walk from Lake Minnetonka, the mansions of the wealthy give way to neighborhoods of simpler houses such as the one the Fedies own -- a tastefully decorated but compact three-bedroom ranch-style house. Though this house has served them well for most of the seven years they've owned it, the couple feel its layout no longer meets the family's needs. ''The children spend most of their time in the basement family room,'' says Wendy. ''So we rarely use the two nicest places in the house, the living room and formal dining room.'' Bedrooms are another problem; there aren't enough of them. Wendy runs an alterations and dress-design business from a 12-foot-by- 12-foot bedroom adjacent to the family room. That leaves the two children doubled up in a 13-foot-by-13-foot bedroom on the first floor. ''We'd like the girls each to have their own bedroom,'' says Wendy, a tall, slender woman who designs and makes much of her own wardrobe. ''And since we may have another child within the next few years, we really need a house with four bedrooms.'' As for location, the couple want to stay in the Lake Minnetonka area, which, in addition to Wayzata, includes such towns as Orono, Plymouth and Long Lake. The Fedies are not strangers to trading up. In 1977, two years after they married, they bought a tiny two-bedroom cottage in desperate need of repair for only $30,000. They stripped the window frames and stained the wood, wallpapered and painted throughout and installed new carpeting. A year and a half later, they sold it for $47,000 and used the profit as a down payment on their present house, which carries a 12%, 30-year fixed-rate FHA mortgage. Last year an appraiser estimated the house's value at $105,000. The couple figure it would sell for $8,000 to $11,000 more on today's stronger resale market. One feature of the house that the Fedies are reluctant to give up is the low monthly payment -- about $748 for the mortgage, taxes and insurance. This year Steve will earn $35,000 teaching and an extra $3,000 for his coaching duties. Refereeing high school basketball games nets him another $500 or so each year, and royalties from a marketing textbook he wrote in 1982 bring in an additional $500 annually. Last year Wendy earned slightly more than $3,000 from her alterations and dress-design business. With her older daughter starting kindergarten this fall, she expects to devote more time to the business and boost her income to about $7,000 for 1986. The Fedies' search for new digs began in 1984; Wendy's mother, a real estate agent for Coldwell Banker in Wheaton, Ill., referred the couple to a saleswoman in the Lake Minnetonka area. But the venture ran into a snag: interest rates upwards of 13%. ''The agent talked about wraparound mortgages, second mortgages and all other kinds of creative financing so we could afford to buy,'' says Wendy. ''But we didn't feel comfortable.'' They then considered building an addition to their house. A local contractor estimated he could add a bedroom to the main floor and a room onto the basement for about $17,000. ''But we decided against that,'' says Steve, ''because real estate agents told us it would price our house out of the neighborhood, and we wouldn't get our money back if we sold.'' Thus the Fedies put their plans on hold for a few months. Then, while paging through a local newspaper in spring 1985, Wendy saw a picture of a four- bedroom Cape Cod for sale in Orono at only $120,000. Unfortunately, the price didn't include a finished second floor. ''That would cost another $30,000, which put the house out of reach,'' says Wendy. But with interest rates on a slide that would take them from roughly 12.5% for a conventional 30-year mortgage in March 1985 to 10% or so 15 months later, the couple persisted. They first made the rounds of used houses priced between $115,000 and $130,000 -- and were immediately put off by many of them. ''We saw homes where the woodwork was battered and bathtubs were rusted through. Others had crazy decorating schemes,'' says Wendy. Although they haven't abandoned the idea of buying an existing house, the couple are increasingly considering having a new home built for them. ''We know that's more expensive than buying a used house,'' admits Wendy, ''but we figure there are other ways we can save with a newly built home.'' The superior energy efficiency of a new house is one possible source of savings, especially in Minneapolis, where temperatures dip below freezing an average of 158 days a year. They have talked to one builder who estimates that the $3,000 worth of extra weatherproofing he puts into his standard new four-bedroom houses can cut yearly heating bills from $700 to $300. Because they have been looking to trade up, the Fedies have made a special effort to steer clear of additional debt. Wendy, who confesses a weakness for impulse purchases on credit cards, recently put her plastic away. This has helped reduce their charge-card balances to $500. And last February they bought a $13,820, 1986 Oldsmobile Cutlass station wagon without taking out a loan. Says Steve: ''We scrounged around to come up with cash because we didn't want a big car payment that might prevent us from qualifying for a mortgage.'' They dipped into savings for about $1,500, got $6,000 for trading in their 1984 Chevy Chevette and pulled $4,000 together from income, the bulk of that from the lump-sum payment Steve gets for coaching. Wendy's mother chipped in with a $2,000 gift. Steve, the fifth of eight children, grew up in Mondovi, Wis., a rural hamlet of 2,545 people about a two-hour drive east of Minneapolis. His father was a carpenter, his mother a homemaker, and he was an accomplished athlete. In high school he played baseball, basketball and football. He then attended the University of Wisconsin-Stout in Menomonie, Wis., where he was the starting quarterback on the university's football team in the early '70s. As for academics, he admits he had an uncertain game plan, bouncing from electronics to psychology to business administration before settling on education as his major. He earned his undergraduate degree in 1974 and has since earned a master's in vocational education. The couple met in 1973 at Stout, where Wendy, who had grown up in Lake Villa, Ill., just north of Chicago, was studying apparel, textiles and design. She came to a party with the football team's backup quarterback, was introduced to Steve and within a week had switched to first string. They were married in 1975 and settled in the Lake Minnetonka area the following year, after Steve was offered a teaching job at Orono High. While the Fedies' life style isn't spartan, it is hardly extravagant. For the most part, the couple's entertainment centers around sports. ''During the fall, it's Orono High football games every Friday night,'' says Steve. The couple also regularly attend University of Minnesota football and basketball games in downtown Minneapolis. For the past eight years Steve has played third base on a softball team that once competed for the national championship. The Sunday games provide not only competition but an occasion for family picnics. Steve and Wendy readily admit that they have dragged out the process of trading up much longer than most home buyers. Although they are not under any immediate pressure to move, they realize that procrastinating any longer may hurt them. ''If interest rates go up, that'll change how much of a house we can afford,'' says Steve. Recently, Wendy stood in the living room of their Wayzata home with its built-in bookshelves and country-style furniture and summed up her feelings toward leaving this house for a new one. ''It's not just a financial decision,'' says Wendy. ''It's an emotional one too. This really is a beautiful house -- that makes it kind of difficult to leave.'' BOX: A roof on debt To make sure they will qualify for a mortgage when they finally find a house, the Fedies have avoided new debt. In February, for example, when they traded in a 1984 Chevy Chevette and bought a 1986 Oldsmobile Cutlass station wagon for $13,820, they paid cash instead of taking out a loan for the roughly $8,000 balance. Income and outgo for the 12 months that ended May 31: Income Steve's salary $35,506 Sale of 1984 Chevette 6,000 Wendy's sewing income 3,218 Tax refund 2,247 Gift from Wendy's mother 2,000 Withdrawal from savings 1,500 Royalties and refereeing fees 1,000 Total $51,471 Outgo 1986 Olds Cutlass Wagon $13,820 Taxes 8,052 Mortgage payment 7,272 Food and clothing 6,000 Utilities 2,232 Furniture and appliances 1,650 Savings 1,500 Payments to pension plan 1,380 Entertainment 1,200 Life insurance 1,032 Household maintenance 1,000 Gifts 950 Miscellaneous 865 Auto maintenance 720 Tax-sheltered annuity 720 Contributions 660 Auto insurance 600 Child care 501 Dues 370 Credit-card payments 360 Homeowners insurance 301 Mortgage insurance 286 Total $51,471 Assets (as of May 31, 1986) House $113,000 Personal property 25,000 Cars 14,500 Steve's retirement fund 10,500 Annuity 4,500 Savings account 1,500 Wendy's business equipment and inventory 1,500 Cash 940 Total $171,440 Liabilities Mortgage $56,700 Credit-card balances 500 Total $57,200 Net Worth $114,240