I think this is a good way to look at it. If you can afford to move and take the hit, then that’s fine. Your mental health is worth more than staying in a place you truly hate.
However, I think that new builds can also be fraught with stress. They really can be built badly and depending on the builder, they just don’t give a shit.
Use this time to weigh up the pros and cons of both. Do you really hate the area of the house? Or is it just the house? If it’s just the house, how much would it take (both money and emotionally) to fix the house?
I’ve done both and they were pretty much on a par in terms of stress level.
Can you put a finger on why you are finding your current house situation so stressful?