I can’t afford a house right now. Am I screwed?

“Should I buy a house?” That’s the question that a listener, Miranda, brought to Explain It to Me, Vox’s weekly call-in show. “I think that’s always been the go-to investment for past generations,” she says. “You buy a house and that’s kind of your retirement plan, and that just doesn’t seem realistic or even attainable.”

Miranda is far from alone in questioning whether homeownership is still the reliable engine of building wealth as it was for past generations. The US is in the midst of a housing shortage as millennials and Gen Z reach their prime home-buying years, but many are locked out of the market. Gone are the low post-Great Recession interest rates, all while the net worth of homeowners eclipses that of renters.

It’s a complicated calculation, one that Mandi Woodruff-Santos knows well. She’s the host of Brown Ambition, a wealth and finance podcast. “I bought my house in 2018, which feels like a thousand years ago,” she says. And initially, she wasn’t completely sold on the idea of homeownership. “I didn’t realize how little I desired to actually own a home until my husband was like, ‘Get me out of this concrete jungle! I want to touch grass.’” Eventually, a house just outside New York City won her over. “We were able to find a home in a great neighborhood that was within walking distance of the train. I saw this little house, and I thought, ‘I want that house.’ And that’s how I ended up here.”

How do you determine if homeownership is right for you? And if it isn’t, what are other ways to build wealth? That’s the topic of discussion on this week’s episode of Explain It to Me, which has been edited for length and clarity. You can listen on Apple Podcasts, Spotify, or wherever you get podcasts. If you’d like to submit a question, send an email to askvox@vox.com or call 1-800-618-8545.

We’ve been told for years that buying a home is this important milestone for adulthood and the first step to building equity and wealth. But with the current prices and interest rates, the barrier to entry feels especially high. What do you make of that advice about home buying?

It’s kind of like when you become a new mom: Don’t get any of your parenting advice from someone who hasn’t been a mom in like the last two years. You need fresh intel, and the reason is that so much changes. If you’re getting advice from your parents, relatives, and, frankly, journalists, too — we tend to be a little bit on the older side — if you’re getting advice from people who are not in the current market, it’s not as applicable because they bought in an entirely different environment.

There are choices I made in 2018 that I definitely wouldn’t tell anybody to make now. I think it’s really smart to ask for opinions and to be open to other points of view, but just understand the context from which they are giving you that advice.

What do you make of the question from our listener? Is buying a house something she should be working toward?

If you understand maintenance, if you understand property values and how they can be impacted by things like development and weather patterns — if you understand all these things and you still really want to buy a house, then yeah, go get your house! The ultimate thing is — can you afford it?

Now there are all sorts of different trains of thought about if a house is a good investment. I think you have to understand why you’re buying a house. Are you buying a house for your family to live in for the next 10-plus years? That’s a very different equation to me than if you’re buying a home that you’re hoping to fix up and flip on the market in a year or two, where you want to see a much higher return on investment. But if you’re someone like me who’s like, “I want a place where my kids can grow up” — that is less about the ebb and flow of the current market and more about if this is a good long-term decision for me.

So what I would look at today if I’m thinking about buying a house are mortgage rates. They aren’t cute right now.

Very ugly right now.

But they’re not as ugly as they could be. In the ’80s, people were just walking out the door with double-digit interest rates. So interest rates aren’t great, but they’re not the worst they’ve ever been.

What’s more difficult these days is inventory. I wouldn’t just buy whatever’s there because you want to buy something. If you can wait, wait until you find a home that you really like and fits all your needs. It’s worth it. Speaking as someone who is stuck in a starter home, I got my cute little 2 percent interest rate, but I’m in the tiniest little house in my neighborhood and we are busting out of the seams.

Also, look at your lifestyle. At the end of the day, it’s your choice. You’re going to be living in it. Get clear with yourself on what you want.

So if you sit down and you find out where you are emotionally, where you are when it comes to lifestyle, and you determine that buying a house is for you, what are the first steps? What do you suggest that a person do?

Your credit score is going to determine how expensive that mortgage is going to be. I would say six months before you think you’re ready, you want to look at your credit and take an assessment. Mortgage rates right now are around 5, 6 percent, 7 percent. They’ll be even higher if you have poor credit. You want to avoid taking out additional loans six months before you apply for a mortgage because mortgage lenders don’t like to see new debt right before they’re going to potentially approve you for a loan.

Ideally, you’re not going to have a fluctuating income. So if you’re going to get a new job, that’s fine, but it can make it a bit more complicated. Your lender wants to see a couple of years’ worth of income, and they like to see it from one employer because this is about them wanting to pick a candidate for a loan who’s pretty reliable. So for my freelance girlies, my solopreneurs, like me, it’s not impossible, but you may want to talk to an accountant about how you can structure your business so that you are paying yourself as a W-2 employee.

Also, saving up beyond that down payment. There are these things that pop up, and there’s nothing worse than realizing you don’t have the money in the bank for these extra expenses.

If you’re a first-time homebuyer, I would absolutely spend time researching first-time homebuyer programs. There are some through the federal government — and Lord knows what’s happening with them right now — but check out the Department of Housing and Urban Development’s website. Check out the Federal Housing Authority. See if you qualify for a first-time homebuyer loan. There’s also a program called NACA, based in homeowner education. So if you go through their education program, they help buyers who are not maybe the most marketable candidates for a mortgage access to homeownership. There are credit unions, local banks — you may find state programs.

So that’s if you want to buy a home. But say you can’t buy a house or just don’t want to. How do you build equity? What can you do?

Yes, a home can be a vessel for increasing equity and building wealth. But it is not the only game in town. Ever heard of index funds, mutual funds? You can absolutely invest in the stock market, invest through your 401(k), and max out your Roth IRA.

Also, invest in yourself. I don’t mean go get a brand-new degree. What do you value in life? And if that’s travel for you, if that’s helping to care for family members, if that’s moving to the city you’ve always wanted to move to, or just taking a chance on yourself and investing in an experience that aligns with what you value and what you want. At the end of the day, you can look back on that and say, “Yeah, I did that for me and I have no regrets about it.” Who’s to say that’s not a wise financial decision? Maybe a calculator or an economist, but at the end of the day, you’ve got to live with yourself.

I love that approach because there are all these different methods to finances, and I don’t think that there’s a “right way.”

I’m not trying to sugarcoat the entrepreneur lifestyle, but when I say invest in yourself, maybe it’s investing in a business goal that you have, setting aside some money that you can start earning and saving on the side while you’re working nine to five. Invest in a business idea that you have. Who’s to say that your business couldn’t have a better return on investment than a home if it does well? Who knows?