Brian Tracy, author of several great books, including The Psychology of Selling, has a great saying that applies here: “People seldom buy logically; instead they buy emotionally and then defend it with logic!”
Never approach a home from the standpoint of the value first and then work backward to the payment. Instead, first establish how much money is available to comfortably put down without depleting cash reserves and creating financial risk. Next, establish the maximum affordable payment, or MAP, for your short-term cash flow based on your budget. Last, establish the maximum term to achieve long-term debt freedom and retirement goals. Based on these three criteria, you can work forward into a home value that is truly affordable without compromising your overall financial picture.