In order to investigate the effect of considering liquid density dependence on local fluid temperature in the thermal-hydraulic stability, a linear stability analysis is performed for a boiling natural circulation loop with an adiabatic riser. Type-I and Type-II instabilities were to investigate according to Fukuda-Kobori's classification. Type-I instability is dominant when the flow quality is low, while Type-II instability is relevant at high flow quality. Type-II instability is well known as the typical density wave oscillation. Neglecting liquid density differences yields estimates of Type-II instability margins that are too small, due to both a change in system-dynamics features and in the operational point. On the other hand, neglecting liquid density differences yields estimates of Type-I stability margins that are too large, especially due to a change in the operational point. Neglecting density differences is thus non-conservative in this case. Therefore, it is highly recommended to include liquid density dependence on the fluid subcooling in the stability analysis if a flow loop with an adiabatic riser is operated under the condition of low flow quality.