It's possible to record high quality music at your home studio because of the amazing leaps in "prosumer" audio gear. A home recording studio that might have cost tens of thousands of dollars to build fifteen years ago can be put together for less than three thousand dollars these days.
Your first investment if you want to build a home studio should be a high quality computer with lots of hard drive space and RAM. Luckily quality computers are becoming less and less costly. I purchased a computer with 8GB of RAM for just over $800.
After you order your high quality computer (and it's certainly possible that the one you already own is plenty good enough to get started) you need some kind of DAW software (DAW is an acronym for "Digital Audio Workstation") that you will be doing all of your recording and mixing with. One obvious choice is ProTools but that doesn't mean it's the best choice for you, you may want to consider Logic Studio instead.
What's next on the priority list depends on what kind of music you want to make. If you want to make totally electronic music with no recording of vocals or real instruments then there's a good chance you will want to think about various software programs like Celemony Melodyne Editor with DNA but most folks (even those doing electronic music) will want to be able to record vocals and instruments and will need some sort of audio interface.
It should also be pointed that many audio interfaces actually come with a DAW so you may wan to buy your audio interface first.
To give a simple answer to the question "What is an audio interface?" I'll just say it's how your recorded sound (whether it be from a microphone or a direct input) gets into your computer.. Personally I use the EMU 1616 and I highly recommend it for people using a PC who do not need a lot of inputs. But there's really a huge selection of audio interfaces available, it's really too big of a topic to cover in detail. Pro Tools is the so called "industry standard" when it comes to interfaces but that doesn't mean it's the best choice for you.
For most people a microphone is another essential "must buy.". A good mic will allow you to record vocals and all sorts of acoustic instruments. It will clearly be a very important part of your home studio. The SM7 Dynamic Vocal Microphone is one affordable mic you may want to consider. Michael Jackson's vocals on Thriller were recorded with this dynamic mic.
Another really cool piece of gear that is definitely recommend is the Art MPA Gold Mic Preamp because it is a really great deal at consider it's low price online.
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