Would I bonds be a decent short term place to park that money? Right now it's just in a money market account earning .5%.
For money needed in two years, it doesn't sound worth it. You and spouse can buy $20k, at 7 percent you would earn $70 for six months and then you are at risk of a rate change since it's tied to inflation. Then count in the loss of three months' interest at the end of year two when you pull the money. Even if rates stayed 7 percent, which in my view is unlikely, and you did it again next year, you probably will only make a couple hundred bucks for your trouble and the tying up of your funds. I'd rather just put it into a medium-term tax-exempt bond fund and make my 2-3 ish percent. (Vanguard tax-exempt fund showing around 6 percent return over 2 years).
IBonds seem like a decent long-term diversification if you can build it up over a period of years, but it doesn't seem as good for a short-term plan because of all the conditions and uncertainty of ever-changing rates.
Of course, some would argue that if inflation is expected, then buying a house is a great way to "gain" real dollars by having a locked-in mortgage. If you believe inflation is going to stay this high, maybe I bonds are worth it. Personally I don't like choices where I have to guess right, especially for something as important as a house.