$1.2M home, $325K annual household income, $250K down

My wife and I welcomed our first child and are looking to purchase a home in the suburbs now that our family is growing. We both have stable jobs and expect our salaries to continue to increase gradually. We currently own a condo in downtown Chicago - haven't finalized whether we would sell it or put it up for rent. Mortgage on that condo is $1500 a month and I think the going rate for rent is about $4k a month based on similar units.

Before moving forward with our search, wanted to gut check whether it seems like we can afford this much for our next home. We are looking in good school districts so the plan would be there for a while (7-10 years at least).

Edit: I will add that we contribute monthly to our retirement, 529, and the stock market. This is something I want to continue to do as well since we're still young so don't want to purchase something that will put me in a spot to reduce these monthly investments.