Yes, I would agree with your assessment. She wanted a house that cost 50% more, and I didn't think we could afford it. Also her house needed many expensive repairs.
My frustration is with her random eruptions. A year or so will go by when she seems quite pleased with the house as it is. Then, one day, the house is inadequate and I am evil for having "forced" her to buy it. And if I agree to consider moving or expanding, she loses interest in favor of issues more pressing to her.
We have made the kitchen to our liking and added a bathroom with a steam sauna. We can do more. Our neighbors three houses down just added a second floor (we have only an unfinished attic). It's not unprecedented.
