Fiber to Home Increases Home Value, Gigabit Access as Much as 3%

A fiber to home connection increases home value by about $5,437, according to a report written by researchers from the University of Colorado at Boulder and Carnegie Mellon University and funded by the Fiber to the Home Council.

Single-family homes in areas where gigabit fiber service is available have a median value that is 3.1 percent higher than homes without fiber, researchers found.

“When evaluated at the sample median house price of $175,000, that access to fiber may be associated with about a $5,437 increase in the typical home’s value,” the researchers argue.

Researchers based their findings on a nationwide sample of real estate transactions from 2011 to 2013, including  data from 520,931 homes from 116,300 census block groups (CBGs) and 1,634 counties.

Home values get a lift of 1.3 percent when a local network operator has deployed fiber infrastructure capable of supporting speeds of at least 100 Mbps, researchers found. The value grows to 31 percent when gigabit service is available.

What to make of the results might be the issue. The correlation between fiber access and home value does not mean the correlation is “causal,” and there is no way to prove causation.

Gigabit networks, for example, are built in areas where demand is perceived to be the highest, generally also areas where household income is above average to well above average.

So fiber access can simply mean home values are higher because the people in those neighborhoods can afford more expensive homes.

Also, fiber to the home tends to exist in urban and suburban areas more than in rural areas, and home values and incomes tend to be higher in urban and suburban areas.

In that sense, though there is a correlation between the presence of fiber to the home and home value, other inputs might be responsible for the correlation.

The study also apparently studied 55 communities in nine states, finding a positive association between economic activity and fiber access in the 14 communities where gigabit services are widely available.

That is no slam on the research. It’s just that with no actual way to create either a sizable control group or determine the causal chain. Obviously, the argument here is that fiber deployment creates economic growth. It also is possible to argue that economic growth and wealth “create” fiber access.

One also can argue there is some possible mix of causal effects, even if the precise impact cannot really be measured.