Need for speed: As the Internet becomes central to the way Americans work and live, the digital divide is taking on greater economic significance. Students without Internet access at home may struggle to keep up with school assignments. Towns with less access find themselves falling behind economically, researchers say. Now, The Wall Street Journal reports the availability of speedy Internet service is starting to affect Americans’ biggest purchase: their homes. Real estate agents across the country say more and more buyers are turning their noses up at homes without fast Web access. Some studies suggest those buyers are having a keen effect on home prices. A recent nationwide study released by researchers at the University of Colorado and Carnegie Mellon University finds fiber-optic connections, the fastest type of high speed Internet available, can add $5,437 to the price of a $175,000 home—about as much as a fireplace, or half the value of a bathroom. Read the full story (subscription may be required).
On the short end: Mortgage rates hit a 2015 high when the national average rate on a 30-year fixed-rate mortgage hit 4.08% earlier this week, according to Freddie Mac’s weekly survey. As Time reports, that’s lower than where the U.S. average was at this time last year (4.12%), but home loan pricing (rates, loans and fees, taken together) has been on the rise for most of 2015, pushing homeownership out of reach for many Americans, as the cost of a mortgage creeps up. For example, if mortgage rates hit 6%, a third of millennials (people younger than 35 years old) wouldn’t be able to afford homes as they’re currently listed, according to an analysis by HouseCanary, a housing-data analytics company. Given that millennials make up more than a quarter of the population, their ability to buy homes will weigh heavily on the performance of the housing market, which has been driven by baby boomers for decades. Read the full story.
The shift: Since the housing bust gathered momentum in early 2009, buyers paying cash instead of taking out a mortgage have made up a bigger share of total monthly home sales across the U.S. As Consumer Affairs reports, such buyers are generally investors—either “mom and pop” investors flipping one house at a time or hedge funds buying up large blocks of homes and converting them to rental properties. The trend has had a distorting effect on the housing market. But the trend appeared to shift in May. RealtyTrac, a foreclosure marketing company, reports 24.6% of all single-family home and condo sales in May were all-cash purchases, down from 28.5% in the previous month and down from 30.4% a year ago. It’s the lowest percentage of all-cash buyers since November 2009 and well below the 42.2% level of February 2011. The numbers suggest fewer investors are in the housing market and are being replaced by people who are taking out mortgages and who plan to live in the houses they buy. Read the full story.
