I took out $10k from an IRA and bought a house with it in 2010. The house went up 50% and the mutual funds went up 100% so YMMV. Who knows what the future will hold. We got a 30 yr mortgage and will have it paid of in 15 yrs. With the super long period of super low FED interest rates, inflation will ramp up and so will mortgage rates. 30 years is a long time to have a note though and paying it off is a risk-free return.
Buy the house in the best location (close to work, safe neighborhood, good upside potential, quality schools) that will fit your needs and plan to live there for at least 5 years. The second you buy a house you are down the 5-6% commission on realtor selling fees which comes into play if you have to sell whether it be 10 years from now or 1 year from now. Your property taxes will be higher than the previous owner because of the stepped up basis of your purchase price. A home is not an investment because you'll need somewhere to live and you want the choice to be able to stay in the house when you are FI and want to cash out.
I think the biggest expense of having kids is labor costs and childcare. The first year is the most expensive since short-term disability usually only replaces part of income and you have hospital bills, diapers, possibly formula, furniture, and baby gear, etc. For daycare, you can shop around and get estimates already in your area and for ours it's about $1k /mo per kid for the first 4 years then about $500 afterwards for after-school care and activities. Food, clothing, healthcare, entertainment, vacations, college savings are also considerations. You have to really be focused if you really want to retire in 15 years because there are many distractions and unforeseen events called life. I think you will find that you will want to spend most of your time with your kids when they are younger because, well, babies are so gosh darn cute.