Nicole Lapin

a house cost compared to your income.

So in 1970, it was 2.2 times.

Now it's about five times.

And in coastal cities like in Los Angeles, it's 12 and a half times.

In New York, it's 10 times.

In San Jose, it's 10 times.

So

The issue with home ownership right now is that prices are much higher than wages are growing.

And so the opportunity cost is a much bigger factor in this whole equation.

So if you look at the 5% rule, so 5% of, let's say, a $500,000 home is $25,000.

You divide that by 12, so you get your monthly cost.

That's $2,100.

Okay.

So $2,100 is your threshold.

If rent is below that number, then it's better to rent.

If it's above that number, then it's more advantageous to buy.

If you're looking at the cost only, again, this is stripping out what the Pakistani lady is saying at the wedding.

This is stripping out all the voices inside your head.

Yeah, for me right now, it's more advantageous for my husband and my family and I to be very disciplined in taking what we would have put on the down payment and the difference between the cost of renting versus the overall cost of buying.

Yeah, so taking all of that and being really disciplined about investing it.