You’re missing some nuance and your math is off, but yes (kind of).

First, don’t confuse penalty free with tax free. If you withdraw $10K from a Traditional IRA for a first time home purchase, while you don’t have to pay the 10% penalty you normally would, you do have to pay income taxes on the whole thing. So you wouldn’t actually net $10K.

Your math is also off. To figure out how big of home $10K supports if that’s a 3.5% down payment, divide $10K by 0.035. The answer is $285K, not $350K. 3.5% of $350K is $12.250.

There are closing and ownership costs too. Maintenance, property taxes, home insurance, etc.

Finally, houses don’t always go up. In fact, many people are currently worried about home values going down. Leverage is great if you can use the bank’s money to make money, but not so great if you lose money. You still owe the bank their money even if your home loses value. Historically, home prices have risen a bit faster than inflation over the long term, but not as much as stocks and financial investments. So the money you’re taking from the IRA probably would have been earning more where it was.

So there’s a grain of truth to your thinking… but not nearly as favorable as you think.