Fabian Brunåker

I am a Ph.D. candidate at the Department of Economics at Uppsala University, affiliated with Urban Lab and the Uppsala Center for Fiscal Studies (UCFS). My main fields of interest are household finance and urban economics.

Job Market Paper

Optimal Mortgage Choice with Hidden Debt: The Role of Mortgage Design and Inattention

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Abstract: This paper studies the effects of cooperative housing (co-op) debt on apartment prices, optimal mortgage choices, and household welfare. Using detailed Swedish data, I show that 10% of co-op debt is capitalized into housing prices—less than previous estimates—and that this is likely driven by behavioral biases rather than salience. However, existing approaches overlook how households substitute across mortgage types. To address this, I develop a flexible life-cycle model with credit constraints, mortgage design, and capital costs. The model fits the data well and reveals both liquidity benefits and financial risks of co-op structures—facilitating homeownership for credit-constrained households and increasing expected welfare, while rising total mortgage size. I extend the model with a household attention parameter to co-op mortgage costs and estimate it at 89% through structural estimation, indicating partial awareness of hidden debt. When households are inattentive, welfare gains reverse and default risk rises. As co-op debt adds approximately 20% to household mortgage liabilities, the results highlight the need for improved co-op debt reporting and potential policy intervention.

Working Papers

Revitalizing Poor Neighborhoods: Gentrification and Individual Mobility Effects of New Large-Scale Housing Construction

with Matz Dahlberg, Gabriella Kindström, and Che-Yuan Liang

Abstract: Using almost three decades of full-population register data with detailed geo-coded information on how and where all individuals in Sweden live, on their moving patterns, and on their socio-economic characteristics, this paper examines if new large-scale housing construction is a suitable policy tool for revitalizing poor neighborhoods. The answer is yes. We reach four main conclusions. First, we find that new large developments of market-rate condominiums have strong gentrifying effects: the estimated effect on average income is 15% in the poorest quartile of neighborhoods. Second, the effect is not only driven by richer people moving into the newly built owned apartments, but also by average income rising by 10% in pre-existing homes. Since we do not find other concurrent housing-stock changes such as renovations and rent increases, this indicates that the areas become more attractive. Third, most of the gentrifying effects are due to high-income people moving in from richer areas outside a wider neighborhood. Fourth, we do not find any displacement of incumbent residents.

What's in a Label? On Neighborhood Labeling, Stigma and Housing Prices

with Henrik Andersson, Ina Blind, Matz Dahlberg, Greta Fredriksson, Jakob Granath, and Che-Yuan Liang

R&R at Regional Science and Urban Economics

Abstract: Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighborhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police's listing of "vulnerable" neighborhoods, initially introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma from unfavorable area labels through an analysis of how the police list affected housing prices - a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.7% within one year and 6.5% within six years in the designated neighborhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents prior to classification experienced more pronounced negative effects.

Credit Constraints and First-time Buyers: How Increased Amortization Affects Young Adults’ Housing Market Entry

Abstract: Young individuals often rely on access to credit to purchase their first home and enter the housing market. In this paper, I analyze the impact of a reform increasing mortgage amortization demands on young adults' ability to move out of their parental homes and relocate to larger urban areas. The findings show that young individuals with low disposable income or limited savings, as well as those whose parents have similarly low resources, are significantly less likely to move out of their parental homes following the reform. The higher amortization demands exacerbate credit constraints, making homeownership more difficult. Additionally, the overall share of young adults moving into major urban areas declines and those already living in these regions are particularly affected with a reduced likelihood of leaving the parental home. These results suggest that stricter amortization policies disproportionately restrict financially constrained young individuals and those from lower-income families from entering the housing market, reflecting the significant influence of credit constraints on housing mobility and urban migration.

Works in Progress

Rainy Days Are Not Good for House Sellers : The Causal Effect of Weather on House Prices

with Mikael Elinder and Che-Yuan Liang

Abstract: Buying a house is among the most important economic decisions individual make. A careful consideration of how much to pay for a house it therefore clearly in the interest of the buyer. Moreover, for the seller the decision is equally important. We would therefore not expect house prices to be easily influenced by irrelevant factors such as weather on showing hours. By matching weather data to showing times and final house prices we show that houses which are displayed when it is raining are sold at a significantly lower price. Our results indicate substantial inefficiencies in the residential housing market, which are consistent with bounded rationality among both buyers and sellers.

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