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Since 1990s Stockholm housing market has seen deregulations in accordance with liberalization trends in other European welfare states. The new governance principles together with increasing immigration and public rental housing conversions into cooperative housing in attractive inner city areas have put pressure on still rental-dominated estates because fewer rental dwellings must now cater to expanding numbers of people who have little choice on the housing market. In recent decades, many estates have displayed increasing signs of stigmatization, social exclusion, and outflow of relatively affluent people. This paper improves our knowledge of how the housing policy and economic changes have affected out-mobility from the housing estates in case of three cohorts of young people and how the childhood neighbourhood conditions affect this. Individual annual Swedish registry data (1990–2014) are employed to longitudinally study the out-mobility patterns of three cohorts that grew up in the estates against the backdrop of marketization, growing inequality and deteriorating conditions. This study supplements the existing literature on housing estates by clarifying how income has become more and ethnicity less important over time in explaining sorting patterns from these estates. However, the combination of the two has determined sorting throughout the study period. Growing up in a higher socioeconomic status neighbourhood had modest impact on reducing socioeconomic differences in out-mobility from the estates, while leading to more sorting based on ethnic background.

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