That is simplistic and doesn't account for the ability to get loans (investing more money than you have), tax breaks, and the fact that you need to live somewhere in the first place. Buying a house with cash and not living in it is probably a very poor investment, but that isn't what you are comparing.

What are the returns on renting?? Because that is where your money will go if you don't buy. If I forgo a house, I save $1500/month on a mortgage, but now I have a new expense called rent, I can't allocate it to investing.

I can easily borrow against my home equity. I cannot easily borrow against my index funds. Home equity also delivers an almost-fixed tax rate in California (prop 13) and numerous other deductions and incentives, none of which stock investments provide.

Home equity is much more powerful than a fund investment, they are not equals.