This is similar to the “Avoid Credit Card Debt” pitfall, don’t buy too much house. Whereas credit card debt is bad because interest is high, an expensive mortgage is bad because it’s usually going to be around for a long long time (which I suppose is much like credit card debt if you can’t pay it off quickly). The pitfall is that buying too much house ties up cash that could otherwise go towards retirement investing and the fact that money tied up in a house is much harder to access:
While a house does have some tax advantages on the mortgage loan, they are not nearly as good as the tax advantages of a 401(k) plan or an IRA. It’s also much more difficult to get your retirement money out of the house than from a retirement fund. While housing as an investment is something you might want to consider to create more wealth, your own house should not be viewed as a retirement investment, and you should make sure that you can pay your mortgage and contribute to your retirement fund at the same time.
Source: Yahoo Finance