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High house prices and homeownership rates

Author

Listed:
  • Enström Öst, Cecilia

    (The Institute for Housing and Urban Research)

  • Bo, Söderberg

    (The Institute for Housing and Urban Research)

  • Mats, Wilhelmsson

    (Center for Banking and Finance)

Abstract

Earlier research have concluded that high house prices, relative to household income and wealth, and a tax on imputed rent are the most important causes of a countries low ownership rate. Given these findings, it is challenging to apply a similar analysis to a housing market characterized by comparatively high homeownership rates. One candidate for such a comparison is Sweden, where homeownership rates have exceeded 80% for at least the last two decades. From a particularly rich database covering all inhabitants of Sweden, we use observations of some 790,000 households (corresponding to some 2.9 million inhabitants) to analyze the Stockholm region housing market in 2008. The results suggest that high house prices relative to rents are unlikely to be the only key variable explaining the general ownership rate pattern in a housing market.

Suggested Citation

  • Enström Öst, Cecilia & Bo, Söderberg & Mats, Wilhelmsson, 2013. "High house prices and homeownership rates," Working Paper Series 13/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2013_008
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    More about this item

    Keywords

    tenure choice; homeownership; house prices; borrowing constraint; recent movers; parental wealth;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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