[wildwood]

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3 years is a long time and there's no reason why he should forgo 3 yrs of market returns just because he's going to buy a house.

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With all due respect, I have to disagree with this for several reasons (based on where we are in the current intermediate and long term cycles):
1. OP doesn't have alot of market experience.
2. Current market upcycle began approx mar03. I'm not so sure the next 3 yrs are looking up, but of course anything can happen. (buffett has said that the kind of mega bull we had in the 90's only happens about every 50 yrs or so) That means bull market time frames will tend to revert back to the mean which is about 3 to 4 years in length and the gains will be smaller.
3. I believe we are in a commodity bull that began in 99, and historically they last an average of 18 years. Based on history, stocks don't tend to do all that well during these time periods although they will have periods of outperformance. Of course there will be exceptions such as energy, natural resources etc. Buffett is investing heavily in energy and non-dollar investments. He is bearish on the dollar, and it's always dangerous to bet against this guy.
4. House prices are high. Of course they can go higher, but I expect they will be lower in 3 yrs so OP's money will buy more house.
5. On a historical basis, the market is overvalued. Of course that dosn't mean it couldn't go up and become more overvalued, but at least some caution is warranted.

A few more comments. I generally like to stay away from giving financial advice specific to any individual because I don't know their experience, total financial situation, risk tolerance, etc. and I certainly have no financial advisor qualifications. I also don't want to get into a food fight like I see so often on these forums. Just wanted to give everybody some fat to chew on. fwiw