“The biggest improvement most extract brewers can make to their process is to boil their wort in a larger volume. Early homebrewing books instructed brewers to boil the malt extract for a 5-gallon (19-L) batch in as little as 1.5 gallons (5.7 L) of water. Although this is convenient, this convenience comes at a price. Boiling a thick wort is guaranteed to darken it unacceptably and severely limit the amount of hop bitterness. No matter what volume a recipe calls for, always boil your wort at the largest volume you can manage.”
This is taken from the “Brew Your Own” magazine. Catch the full article here: http://byo.com/american-amber-pale-ale/item/10-10-steps-to-better-extract-brewing
On a side note, people commonly report getting lower than expected O.G. readings with their extract beers. More often than not, this is due to complications with topping up your fermenter with water after the boil. The sugars are still in the wort but it takes time for the water to blend in homogeneously. Stratification occurs where the water, being lighter than the wort, floats on top. The solution? Mix the wort very well before taking your hydrometer reading. Not only will this provide you with a more accurate reading, you will also be oxygenating your wort to promote healthy yeast activity.