To read the full version of this content please select one of the options below:

Homeownership rates of financially constrained households

Cecilia Enström-Öst (The Institute for Housing and Urban Research, Uppsala, Sweden)
Bo Söderberg (National Board of Housing, Building and Planning, Stockholm, Sweden)
Mats Wilhelmsson (Royal Institute of Technology, Stockholm, Sweden)

Journal of European Real Estate Research

ISSN: 1753-9269

Article publication date: 7 August 2017




This paper aims to examine tenure choice in the Swedish housing market with explicit consideration of households’ credit constraints in combination with age and ethnic background.


Observations of some 940,000 households were used to analyse the Stockholm housing market in 2008, prior to the implementation of the mortgage cap. The tenure choice models were estimated using a two-stage instrument variable (IV) logit and probit model with ownership or renting as outcome.


The results suggest, as expected, that being financially restricted is negatively related to owning. In particular, financial restriction is more binding for young households and households with a foreign background than for other types of households. These two sub-groups are also known to have difficulties establishing themselves in the rental housing market, and are therefore specifically vulnerable to further financial constraints such as borrowing restrictions or amortization requirements.


The government in Sweden has become concerned with the rapid growth in household indebtedness. As a response, a 0.85 loan-to-value ratio mortgage cap was introduced in 2010. However, critics are concerned with the effects this may have on the possibility for certain households to purchase a dwelling.



Enström-Öst, C., Söderberg, B. and Wilhelmsson, M. (2017), "Homeownership rates of financially constrained households", Journal of European Real Estate Research, Vol. 10 No. 2, pp. 111-123.



Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

Related articles