Also try and ask yourself - will this be a house that I expect my young kids to graduate from high school in? If so, pick a solid place.
That doesn't mean you need 2,300 sq feet or 4 bedrooms.
It means a place where everyone in your family has the necessary room but, more importantly, in a good school district. Let's say in my city, $160,000 gets me a split level in the best school district and $160,000 gets me a palace in the worst. Give me the split level. 101 times out of 100. Fewer worries about the future. Neighborhoods can go from good-to-so/so or so/so-to-bad. They never go from bad to good.
The rates are really low, especially for a 15-year mortgage, which I would strongly advise if you can swing it.
What else to avoid (the usuals): a busy street. Even a secondary street that is busy I wouldn't live on with small children. If you are in an area where most people park their cars on the street but are also close to one where they park their cars in driveways instead, I'd go with the latter -- for safety for your kids and for resale value. Mature trees or newer subdivisions? If for the long-term, I would suggest the newer subdivisions -- the trees will grow there in time.
I would also mildly suggest to "cool your heels". If you are currently renting and looking... you're the prime customer. No house to sell. No baggage. I would strongly recommend that you go to every open house in the neighborhood you want to live in. Regardless of the home's price. Look at $75,000 shacks. Look at $550,000 mansions. Take it all in. Enjoy this process now. Perhaps the house you buy will be unexpected.
In each of our first three houses, I remarked "I hate this damn house!" at least once. Sometimes it was the small size. Sometimes it was small size and lower-class end of town. Yet, in our current home, sure it isn't the biggest on our street even but I love the location, love the house and don't mind paying for the upkeep.
Your house will be your largest expense in life, unless you're really into hookers, cocaine or German cars. I place a premium not in possessions like cars or jewelry but I do put a lot of stock in "how does this home make me feel?" when I pull up in the driveway after a long day. It's not a huge house by any means -- but it fits our needs very well.
Happy hunting.