Well, I remember when my wife and I were house hunting. We have about as close to perfect credit as you can get. (I'm 820 and she's 835). We figured we could afford between 170,000 to 225,000 tops.
When we went for our pre-approval so we could shop with loan in hand, they (banks) were hurling 550,000 to 650,000 pre-approvals at us.
It's very, very easy to get a house way over what you can afford. In fact, that's what caused most of the 2008 crash to begin with.
(In the end, we bought our house as it was being built for 192,000. They tried very, very hard to upsell us the entire time. We wound up firing our agent and doing it on our own.)