In Debt but Still Happy? Examining the Relationship Between Homeownership and Life Satisfaction

Sebastian Will () and Timon Renz

ERES from European Real Estate Society (ERES)

Abstract: We investigate the relationship between homeownership and life as well as housing satisfaction. Using panel data from Germany, we find that compared to renting, owning a home positively affects housing satisfaction. Contrarily, we find no significant effects 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 event 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. Paying off a loan does not differently affect the housing satisfaction of both types of buyers. We conclude that the negative effect of the financial burden of a mortgage could offset the positive effect of homeownership.

Keywords: financial burden; Home Ownership; household finances; subjective well-being (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2023-01-01
New Economics Papers: this item is included in nep-eur, nep-hap and nep-ure
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Related works:
Working Paper: In Debt but Still Happy? – Examining the Relationship Between Homeownership and Life Satisfaction (2022)
Working Paper: In Debt but Still Happy? Examining the Relationship between Homeownership and Life Satisfaction (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2023_170

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