I sympathize with those who have increased their budget in a hot market. We increased ours a ton! We didn't "blow" our actual budget, but we are way above our price range when we started looking.
Our city regularly shows up on "best places to live" lists and people keep moving here, driving housing way up. Just to give you an idea: when I worked in property management 5ish years ago, a 2br/2ba apartment with a garage was around $1000/month. Now it's $1800-2000. Needless to say, prices have gone way up. Legal mj also has a big impact on people wanting to move here.
We did the math, without looking at the market and said: at what price range will we be able to have a stupid high savings rate (meaning maxing both 401s, roths, and putting tons extra into taxable), and started looking at homes in that range. Homes that were going for 200k years earlier were now 300k and so on. We started looking at the $250k range, and all we found were homes that needed a ton of fixing up. We're fine with cosmetic renovations, but we wanted to avoid the HVAC, plumbing, electrical, and/or foundation issues that we were seeing in houses at that price range. So we bumped it up to $350k. That's a an average price for a non-downtown single family home (we wanted suburbs). The issue here was that homes were getting bid up over asking price and being snatched up too quickly. In our minds, the value wasn't there.
We ended up right at $400k for our house. For that we got a house we will never outgrow (2700sqft plus an unfinished basement), in a top school district, walkable to stores and services, bikeable to my work, and not in horrible condition. About 50% of our neighbors are the original owners from 20 years ago, which is highly unusual for our transient city. Most people are here for 3 years, then leave, due to plenty of military/government employment in the area.
Yes, the cost is that we have a little less money available for investments, but we saw first hand what it was like to "blow" our original budget. We were still way under what the bank approved us for ($650k)! And, we'll still be able to save, and travel, and eat out, and retire in our late 40s/early 50s, which is extremely luxurious in our minds.