January 17th, 2017 5:21 AM by Jackie A. Graves, President
Young homebuyers facing weaker
The potential of young Americans to become
first-time home buyers has been weakened by the rise in mortgage rates.
Fitch Ratings says that the mortgage capability of
millennials has slipped 9 per cent since rates started edging up late last year
and hit a two-year high at the start of 2017.
The firm calculates that the rise in rates means
that the median value of a home that a borrower under 35 could afford dropped
from $120,000 in September 2016 to $109,000 now. Meanwhile home prices are
As well as the effect on the housing market from
fewer first-time buyers, Fitch notes that if millennials miss out on building home equity in
their younger years, it will have a long-term financial impact.
Consumers more accepting of mortgage
The disruptive influence of technology is
highlighted by a new survey which shows growing acceptance of so-called
The global poll which includes the US and Canada,
by professional services firm Accenture, reveals that seven out of ten
consumers welcome the idea of using automated advice services but there are
still important roles for humans!
Robo-advice is most accepted for investments (78
per cent), choosing insurance products (74 per cent) or a bank account (71 per
cent) but for mortgage advice, most respondents (61 per cent) said they would
prefer to deal with a human advisor.
“While financial institutions may expect to
benefit from internal cost reduction by providing customers with a ‘robo’
option, our research found that consumers also expect first-class human
interaction,” said Piercarlo Gera, senior managing director, Accenture
As well as for mortgages, most consumers would
also prefer to deal with a person for complaints (68 per cent).
The survey also reveals that consumers are
becoming more open to buying financial products from non-traditional outlets
with almost a third saying they would consider getting financial advice from
Google, Facebook or Amazon.
While the Canadian responses show that 56 per cent
are willing to use a robo-advisor, Gera says the future appears to be a hybrid
“Successful financial services firms will
therefore need a "phygital" strategy that seamlessly integrates
technology, branch networks and staff to provide a service that combines
physical and digital capabilities and gives consumers a choice," he
By Steve Randall - To view the original article