Context and personal situations are the key drivers. My past clients will tell you that I always counsel avoiding the “house poor” trap. Yet because transaction costs in home buying and selling are significant and moves are disruptive if you are in a situation where incomes will be rising and family size growing or you’ll be caring for parents down the road it might be the time to stretch while still staying true to your budget.
I’m currently teaching a class on Financial Stewardship so if you are looking for counsel in this arena reach out to me in addition to reading this excellent article on the topic. Pay special attention to the suggested emergency savings buffer or 3 to 6 months.