Report: Millennials hesitant to enter national housing market due to rising debt

PHOENIX — A fear of falling into debt is one of many factors keeping millennials out of the housing market, according to a Valley real estate agent.

A new Bank of America report showed 94 percent of millennials are afraid of falling into debt, with 79 percent unwilling to dip into their savings.

Jason Mitchell with Jason Mitchell Realty Group said student loans are also keeping millennials out of the real estate market.

“Millennials are just indebted with student loan debt,” said Mitchell. “A lot of millennials are forced to live at home with their parents or forced to rent apartments.”

But millennials who rent are not getting their money worth in the long term, according to Mitchell. For instance, someone renting an apartment for $1,200 a month could see that number increase in the coming years.

“Come 2018, that $1,200 now becomes $1,400 (or) it becomes $1,500,” Mitchell said.

He said a 30-year fixed loan is set in place, which should encourage millennials to make investments in homes.

Donovan Reese, a real estate broker with Renter’s Warehouse, has seen millennials make investments in real estate. He said some are buying homes on the outskirts of Phoenix and renting them out while living closer to the Valley’s urban areas.

“They can have that house out in Queen Creek and not have to commute from Queen Creek every day,” Reese said.

Reese said millennials are better off investing in houses instead of condos. He said homeowners association fees are usually cheaper when it comes to houses.

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