The middle class is shrinking, according to the Pew Research Center. RealtyTrac staffer Peter Mills picked up the study and writes that this is why there a fewer first-time home buyers, homeownership levels have fallen, and rental rates have increased.
“With mortgage credit tightening,” said J. Ronald Terwilliger, chairman emeritus and retired Chief Executive Officer of Trammell Crow Residential, “the national homeownership rate has plummeted to a 48-year low. The homeownership rates for African-American and Hispanic households have fallen dramatically, while fewer first-time homebuyers are entering the market despite historically low interest rates. As if trapped in a vicious cycle, many young families are finding it difficult to save for a mortgage down payment because of rising rents
“These problems of rental affordability and homeownership access are likely to worsen over the next 15 years as millions of young millennials,” he adds, “many of them African-American and Hispanic, form households for the first time.”