Homeownership and residential stability: does tenure really make a difference?

Homeownership has long been associated with a myriad of economic, social and civic benefits, prompting countries such as Norway to expand access to homeownership for socio-economically disadvantaged households. In this paper, we explore the impact of homeownership on residential stability using a longitudinal data-set of renters who applied for a state mortgage programme in Norway between 2004 and 2010. These data allow us to specifically address the issue of selection bias in our analysis. We find that even after controlling for a wide range of demographic, socio-economic and housing market characteristics, homeownership has a substantial, positive impact on residential stability. This effect is stronger for groups that are more marginalised in Norwegian housing and labour markets, including East European and non-Western immigrants. The Norwegian case suggests homeownership policy can help to promote social goals, but also highlights the importance of providing welfare supports in tandem with access to mortgage credit in order to reduce the risks of homeownership for lower-income households.