Paying for a house with bitcoin sounds to me a mistake or lack of financial knowledge.
Don't think like this, paying with Bitcoin for anything that you need is worth it. What makes you stop is the value of it might increase paying but please do remember that if something has been able to get filled because you've paid using Bitcoin, don't feel regret on it.
That's actually the purpose of Bitcoin why satoshi made it and that's for peer to peer transactions with merchants like this. Both of you get to enjoy the monetary value of Bitcoin and its features too.
Yes that's right. I don't see any harm in paying for a house using Bitcoin. If both parties agree, what's wrong with that? Both parties certainly benefit, both those who pay with bitcoin and those who receive bitcoin, of course with transactions like this both already know about bitcoin which means this transaction can be carried out. I assume that even if a person pays for a house with bitcoin it means he has a lot of bitcoin so he thinks that rather than selling it in fiat then paying for the house will incur additional costs because of the buying and selling process. Likewise, those who receive payments in bitcoin, maybe they want to invest in bitcoin, that's why they choose to be paid using bitcoin. So I mean there's nothing wrong with bitcoin being used as a buying and selling transaction, after all bitcoin is also money.
We can see that regret from OP that it's like a waste investment for him. That's fine because all of us treats Bitcoin as an investment but don't forget that it's also being used as payment. How the adoption will grow if no one's going to spend it? We have to spend it and that's in anyway that you are comfortable, could be to trade for another currency which is the common but it's better if there are services that you can pay directly with Bitcoin.