| 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. |