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The choice depends on many factors. I usually start building upgrades after all the dwellings are available in my town. In principle, if the main hero or the second hero is Ossir, plus a dwelling nearby on the map, and the map is rich, it's quite possible to try upgrading and then go look for wood.
You shouldn't save resources; you should find more of them, and upgrading archers is essential for that. The exception is when key guards cannot be defeated by them.
Hmm... Here's an example of a small map - Former Friends. You probably know that whoever takes the center first has an 80% chance of winning. On this map, rushers like Orcs, Mechanists, and Letos are dominant. And it's almost impossible for an Elf to break through to the center early without upgrading archers. With the upgrade, I buy a Dragon on day 5 or 6. Why should I wait for Ents?
Yes, it's a good example of a map where it's really bad without an upgrade, but even with the upgrade, it's not easy for the Elf. On day 5-6, correct me if I'm wrong, you don't always manage to get there (you need a bit of luck with neutrals), starting from the red spawn, and you suffer significant losses after the battles on the bridge, the outpost, and for the nearby artifact, unless you're extremely lucky with the neutrals. But someone like Kaspar can very reliably (from the blue, earth spawn) break through the bridge and the artifact guard by the end of day 3 without losses, because only alternate dogs, archmages, and old druids can theoretically cause him losses. Everything else is defeated without losses, plus gargoyles and, with some risk, gnomes. And if you meet in the center area, the Plague Tent will do its dirty work.