Abstract. This study investigates the relationship between homeownership and subjective well-being. Using long panel data from Germany, we find supporting evidence for greater life satisfaction among owners compared to renters only when omitting housing characteristics. This effect reduces by more than half when comparing only owners with a mortgage to renters. Examining a variety of domain satisfactions, we show that owners, regardless of debt, report greater housing satisfaction. In contrast, mortgage-holding owners are significantly less satisfied with their income compared to renters. Assuming an aggregation of domain satisfactions to life satisfaction, we argue that the negative effects of the (size of the) mortgage cancel out the positive effects of homeownership. Moreover, we find a significant negative association between indebted homeowners and emotional well-being regardless of controlling for housing amenities. Finally, we find lower subjective well-being indicators with increasing debt-to-income ratios. We conclude that the mortgage of a self-occupied home imposes a burden on life and income satisfaction as well as on emotional well-being. 

Will, S., Renz, T. My Home is My Burden? Homeownership, Financial Burden and Subjective Well-Being in a Unitary Rental Market. Applied Research Quality Life (2023). https://doi.org/10.1007/s11482-023-10184-x  

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Abstract. In contrast to the rising rents of new contracts in many major German cities, little space is given in the public debate on housing affordability to the only slowly rising rents in total. Based on the Income and Expenditure Survey, Bernd Raffelhüschen and Sebastian Will show that incomes have risen more than rents in recent years. Across Germany, the affordability of housing for rent has remained constant over the last ten years. The authors shed light on the distributional aspects of the rental cost burden by differentiating between income, age, employment status and household structure. The heterogeneity of subjective and objective rent burdens can result in social tensions.

Raffelhüschen, B. & Will, S. (2023). Zur Erschwinglichkeit von Wohnungsmieten und den sozialpolitischen Folgen. Perspektiven der Wirtschaftspolitik. https://doi.org/10.1515/pwp-2022-0022   (in German. Translation: On the affordability of housing rents and its socio-political consequences. Perspectives in Economic Policy )

 Available here.

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 impacts housing satisfaction. Contrarily, we find no significant effects on life satisfaction in the long-term. Analysing 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 impacts 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 loan payments on life satisfaction offsets the positive impact of homeownership.

Currently under revision.
Working paper available as No. 1164 of SOEPpapers on Multidisciplinary Panel Data Research Download.

Abstract. In this paper we analyse the influence of housing policies on the relationship between homeownership and life satisfaction. Using cross-sectional multi-level regression analyses, we estimate the effect of homeownership on life satisfaction conditional on the financial burden of a mortgage of a self-occupied home. Further, we show that in societies where the owner-occupied home plays an important role as a tradable good and investment, the satisfaction gap between owners and renters is larger than in societies with a well-developed rental sector with high security of tenure. We conclude that the commodification of housing is an influential moderator on the association of ownership and life satisfaction.

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Abstract. Das EU-Nachhaltigkeitsranking des Forschungszentrums Generationenverträge und der Stiftung Marktwirtschaft zeigt nicht nur die expliziten Schulden der 27 EU-Mitgliedstaaten, sondern auch das Ausmaß ihrer ungedeckten zukünftigen Verpflichtungen, die sich insbesondere aus dem in allen Ländern zu beobachtenden demografischen Wandel ergeben. Projiziert man die mit der Bevölkerungsalterung einhergehende Veränderung der altersabhängigen Ausgaben in die Zukunft, ist eine umfassende Nachhaltigkeitsanalyse der öffentlichen Finanzen der europäischen Staaten möglich. Die Datengrundlage der Berechnungen basiert einerseits auf dem Alterungsbericht 2021 und andererseits auf den Frühjahrs- und Sommerprognosen der Europäischen Kommission. Es wird deutlich, dass die öffentlichen Haushalte der europäischen Mitgliedstaaten im Jahr 2020 nach einer längeren Konsolidierungsphase wieder ein hohes Primärdefizit aufweisen. Daneben ist es vor allem aber der Anstieg der altersabhängigen Ausgaben in den kommenden Jahrzehnten, der im Rahmen einer Langzeitbetrachtung dazu führt, dass 20 von 27 Ländern teils hohe implizite Schulden zu verzeichnen haben. Diese übersteigen in vielen Fällen die expliziten Schulden deutlich. Eine wirkungsvolle Konsolidierung der Staatsfinanzen in der EU wird daher nur gelingen, wenn beide Segmente des Schuldeneisbergs und damit sowohl die sichtbaren expliziten als auch die unsichtbaren, impliziten Staatsschulden in Angriff genommen werden. 

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