High house prices and homeownership rates

Cecilia Enström Öst, Söderberg Bo and Mats Wilhelmsson
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Cecilia Enström Öst: The Institute for Housing and Urban Research, Postal: Uppsala University, Sweden
Söderberg Bo: The Institute for Housing and Urban Research, Postal: Uppsala University, Sweden,

No 13/8, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & 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.

Keywords: tenure choice; homeownership; house prices; borrowing constraint; recent movers; parental wealth (search for similar items in EconPapers)
JEL-codes: R20 R30 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2013-05-22
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