When our girls were young we built a house based on our needs at that time. After they had all moved out we realized we didn't need that much living space, but we needed more "work" space since our office was in our home. I was tired of having the office in the basement, and we didn't have the storage we needed for tools and equipment.
Remodeling wasn't really an option since the basement was already completely finished. We were using our garage as a workshop/equipment shed, which meant that our cars were parked outside. That had to change!
We needed to build the house that worked for us at this stage in our lives. Which was one story over an unfinished basement with an office on the mail level!
You may be in your first home that was purchased when you were single or newly married and it was plenty big for you at that time, but your family is growing or a relative has moved in with you and you need more room. Remodeling may be an option if you just need to add on an additional room. If you have unfinished areas (basement/bonus room over garage) then you certainly can finish those for the needed space.
If you just want to rework the space you have....remove walls to open up a room or update a kitchen or bathroom, add windows to let in more light, these are all options for remodeling your home.
If you are wanting to update the entire house, you may want to consider building since the cost of remodeling is much higher per sq. ft. than building because there is so much more involved.
Consider first if you can get what you need without moving, and if the cost will add the appropriate amount of value to your home. You may be emotionally attached to your home and/or its location. Just remember you can fall in love with a new home and make memories there too!