A woman who studied 600 millionaires discovered where you choose to live has 2 effects on your ability to build wealth

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Living in a home you can easily afford is the key to building wealth.

• Your neighborhood plays a huge role in how much you save and spend, according to two researchers who studied millionaires.
• If you live in a pricey home in an affluent neighborhood, you're more likely to mirror your neighbor's consumption habits.
• This can impact your ability to accumulate wealth over time, as can the home's price - most millionaires live in a home they can easily afford, which allows them to save more money.

There are a multitude of factors that go into building wealth, but perhaps none play as big a role as where you choose to live.

That's according to Sarah Stanley Fallaw, director of research for the Affluent Market Institute. She co-authored "The Next Millionaire Next Door: Enduring Strategies for Building Wealth," in which she surveyed more than 600 millionaires in America.

"The key to wealth building is to live in a home that one can easily afford," she wrote, building upon her father, Thomas J. Stanley's, research. In his book, "Stop Acting Rich," he said that one's home or neighborhood is their greatest detriment to building wealth.

"If you live in a pricey home and neighborhood, you will act and buy like your neighbors ... the more affluent the neighborhood, the more its residents spend on almost every conceivable product and service," he wrote. "We take our consumption cues from our neighbors."

So if your high-income-producing, high-consuming neighbors roll up to the drive in a BMW or a Mercedes Benz, it's likely you'll feel the urge to do the same. This pressure to "keep up with the Joneses" can also be affected by lifestyle creep, the tendency to spend more whenever one earns more.

But it's not just neighborly influences that can affect one's overall wealth - the home's price relative to your income also impacts your ability to accumulate wealth over time, Stanley Fallaw said.

Read more: A woman who studied 600 millionaires found how rich you can get boils down to 6 'wealth factors,' no matter your age or salary

If you want to make progress on building wealth, keep your housing costs low

Most of the millionaires she studied have never purchased a home that is more than triple the amount of their annual income. The median home value for millionaires in her latest study was $850,000 (3.4 times their current income), with a median original purchase price of $465,000.

Just consider billionaire investor Warren Buffett - he lives in a modest house worth 0.001% of his total wealth.

So what constitutes an affordable home?

That depends on your salary, your age, and what state you live in, but the standard measure of housing affordability is 30% of your pretax income.

However, if you really want to make progress on building wealth, Business Insider's Lauren Lyons Cole, a certified financial planner, suggests looking for a place that costs 25% or less of your after-tax income and funneling the cash you save toward your retirement accounts.

"Keeping housing costs low is smart, no matter how much money you have," she wrote. "The best financial move you can make is to literally move to a less expensive home."

Finding a house without breaking your budget is also dependent upon when you buy - according to Holden Lewis, a mortgage analyst at NerdWallet, timing your home purchase correctly, like during the winter or before you get married, can save you money.

But when buying a home, you should not only consider the cost of living, but how you measure your well-being within the city, community, and neighborhood, Stanley Fallaw said.

"We still argue that your more immediate community (your school district, neighborhood, and town) is more important when it comes to your personal happiness," she wrote. "When you're thinking of buying that 4,500-square-foot McMansion out in the suburbs to avoid a two-bedroom fixer-upper in the city, you're trading size of home for commute. What's more important to you?"