One of my children bought their first house a few months ago. They had a lot of the same concerns and worries you have…including that they didn’t want to get priced out.
I have no crystal ball so I couldn’t give them definitive buy or don’t buy advice, but I did point out what history tells us.
The worst-case scenario is that you buy, the housing market tanks, and you lose your job. In this case, you could be under water and trapped in a house that is worth less than you owe and you aren’t able to make the mortgage payment. To protect against this, my position is that:
a) you buy a home you could be happy to live in for 10 years as that is how long the worst of the worst economy tanks lasted
b) you have emergency cash you could access somewhere should you lose your job during a period when you can’t sell your house. That could be a 401K, a relative, something that could tide you over 6 months to a year.
If you have a and b covered and considering that the worst case probably won’t happen, you’re good to go.