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Real estate is cheap out there. A quarter million buys a slightly below average 3-bedroom home out here. Zillow says my house is worth over $300k now, and I'm comfortably able to afford it on a $40k income with a payment (including taxes and insurance) very near to the monthly cost you mention. Then again, it helps that I rent out 2 rooms for $500 apiece including utilities.
Fixed low interest debt (mortgage) is a fantastic hedge against rapid inflation, which is likely in the coming years due to outrageous national debt and over-extended entitlements to baby boomers such as Medicare and Social Security. Writing off interest payments on federal taxes is icing on the cake.
Heck, my plan to pay for my wife's med school if I ran out of cash was to take out a Home Equity Line of Credit (HELOC). The interest rates are lower than student loans, the interest is tax deductible, and the debt can be dismissed in bankruptcy unlike student loans.
There is very little reason to take on other types of debt when home equity is easily accessible, except that some credit cards still offer zero interest for a year.
As with all things real estate, the most important things to consider are location, location, and location.
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