In Debt but Still Happy? Homeownership and the Satisfactions with Housing and Life

Sebastian Will () and Timon Renz

Journal of Housing Research, 2025, vol. 34, issue 1, 29-59

Abstract: We investigate the relationship between homeownership and life as well as housing satisfaction. Following several studies, we confirm the positive relationship between housing satisfaction and homeownership using panel data from Germany. Contrary to most of the literature, we find no positive significant effects of a home purchase on life satisfaction in the long-term. Analyzing short-term effects in an event-study design, we show that both life and housing satisfaction anticipate the acquisition and adapt shortly after. Debt-free buyers, however, do not experience anticipation or adaptation effects at all. Comparing outright homebuyers to debt-financing owners, we show that having a real estate loan affects homeowners’ life satisfaction negatively. The larger the mortgage burden relative to the household income and the last rent paid, the larger is the negative effect on life satisfaction. We conclude that the mortgage burden of a home purchase can offset the positive effect of homeownership.

Date: 2025
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DOI: 10.1080/10527001.2024.2367279

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