Buy as much house as you can afford, right?

Here's a great old article on how much to spend on a house:

Advice on Buying a House

The problem is that everyone seems to have taken this advice at once...

A few real gems:

The Claim: The basic rule is that you should buy as much house as you can afford. Stretch a little.

This advice started to get really bad once various sub-prime and ARM loans became available, making it so that people could suddenly "afford" a much larger mortgage.

The Claim: Use a mortgage broker.

Mortgage brokers aren't always on your side: When to Use a Mortgage Broker

The Claim: Homes are an investment, so buying bigger is better - because it appreciates faster.

Homes may be considered an investment, but they're not a great one. A larger house is going to increase utility bills and upkeep, and the amount of appreciation is, in general (besides the recent housing bubble), probably less than the interest rate on the mortgage. In addition, if you consider a house an investment, doesn't that make the mortgage leverage?