I got a job out of college for Arthur Andersen, a "big 5" consulting firm, at the time before Enron. I started at 50k per year + $10k moving/signing bonus in January 2001. I couldn't afford a place in the Manhattan, so I bought a 800 sqft, 2 bedroom condo in Jersey City for $92k. Since I was a first time home owner, I only had to put down 3%, which came out of my moving bonus. My payments with taxes were around $800 / month, plus $220 maint fee / month.
8 years later, my place is appraised around $250-$300k. Closer to 250 now that the market has tanked. But, this would have been money I would have thrown away had I rented, like most of my friends that started at the same time. If you have to pay for a place, why not start building equity. They could have put their moving bonus towards a down payment instead of paying the apartment broker to find a place in NYC. Brokers charge 15% of the first years rent to find you an apartment and I'm told, you really need to broker to find something good. With first month, security deposit, and the broker fee that's around 10k right there. Down the drain, IMO.
About 4 years ago, I started my own business doing the same thing I was doing for Andersen, and now clear about 300k / yr. I paid off my place and should have moved up to something better, but since I fly every week to my clients from EWR airport, my condo is a convenient 20 minutes to the terminal.
Some of my friends are still renting in Manhattan or in Hoboken. I can't imagine they're saving very much after their big rent bill. I can't believe how much they lost out by not jumping in when we first moved there.
I think the big thing is that you have to live within your means. You can do it even if you make $50k / yr. Pay yourself first by funding your retirement, and try to build equity.