I live in a high COL area. Options are essentially 50-80 year old homes that are in need of repair (major items like roof, furnace, plumbing, electrical, etc), or new construction. The older homes would technically be under budget, but the repairs and costs to maintain the older house would likely equal what I'd pay on new construction. New construction would offer more ease of mind with everything being new, in theory we wouldn't have any expected major items to need replacing for 20-30 years. However, the new construction would eat up about half our budget. Our DTI is below 40 but that is based on GROSS income. After taxes, insurance, etc it would realistically be more like 50% DTI. However, household income is expected to go up come spring with annual raises each year thereafter. Older homes also lack space- often cramped and we would see ourselves outgrowing the home and wanting to move in 5 years. New construction is spacious and would be a home we would live in until we are old. In this particular scenario, would "blowing the budget" be a better idea long term? Yes, things would be tight the first few years but in the long run wouldn't that be better?