Where are you looking at?

Two things are really important right now:
Location
Worth

Location is probably the most important. I suggest you go neighborhood shopping first. Then focus on houses in those neighborhoods. It'll keep you from bothering to look at houses in bad locations.

The worth is a fairly complex formula. It's especially difficult in temperamental areas where whether that 4th bedroom is worth $15k extra and whether or not "updates" are valuable or not.

I highly recommend buying a house that you can afford on whoever makes the most in your family. If not, the Gubmint recommends 28%/36% front end/back end ratios. So your entire cost of your house (principal, interest, taxes, insurance) can be 28% of your income. 36% can be the PITI and the remaining 8% can be for other fixed payments (student loans, car payments, revolving credit, et cetera that shows up on your credit report).

Below are some neighborhoods I selected.

This house is in my favorite neighborhood. This house would have sold for $240k a year ago:
http://www.shorewest.com/homes/11785...-WI-53186-1636

The houses in Waukesha in that same neighborhood were selling for $220k a year ago. Now they're lingering on the market in the $190k range. If you do the math, they're worth in the $175k-190k range for a 3 bedroom 2 bath colonial. I made a lot of offers in this neighborhood in the $210-$220k. No one accepted. Several of those houses eventually sold in the $190k range.

This is another one of my favorite neighborhoods, on a budget but still safe. Two years ago a bargain was $180k. The neighborhood is worth about $140k for a 3 bedroom 1 bath.
http://www.shorewest.com/homes/11706...-WI-53188-2349

This is my favorite yuppie neighborhood. It's expensive enough to keep out the riffraff, close to good schools, yet close to the expressway. Across the street (Meadowbrook/Merril Hills/TT/G) is Pewaukee. You trade a tax payment for a house payment and no sidewalks. This particular house has been for sale forever.
http://www.shorewest.com/homes/11691...-WI-53188-1339