US Housing Demand Hits 'Record Lows'
The U.S. housing market is experiencing its worst-ever demand, with January 2026 home sales down 42% from their pandemic peak, according to analyst Nick Gerli. He attributes the slump to severely eroded affordability as prices have outpaced incomes. The analysis suggests that only a significant increase in inventory and a decrease in prices can restore market health.
- In the Netherlands, the government is taking a more active role in housing, designating at least 30 new large-scale construction sites where new developments must consist of at least two-thirds affordable housing. To accelerate building, a new program starting in 2026 will provide municipalities with a €7,000 subsidy for each affordable home that begins construction. - The Dutch government aims to build 900,000 new homes by 2030 to address its housing shortage, but nitrogen emissions regulations and the new consolidated environmental law (Omgevingswet) have created planning uncertainty and project delays. To streamline processes, a forthcoming "Simplification Act" aims to simplify regulations for adding stories to existing buildings and will eliminate above-statutory municipal building requirements. - To improve affordability, the Netherlands will eliminate the maximum rent limit for housing allowance eligibility starting January 1, 2026, though the benefit calculation will still be based on a maximum rent of €932.93 for tenants over 21. This comes as regulated rent increases for 2026 are capped at 4.1% for social housing and up to 6.1% for the mid-range rental sector. - The Dutch construction sector, which is responsible for half of all raw material use in the country, is under pressure to adopt circular economy principles. However, only 8% of materials currently used in building projects come from recycled sources, with most waste being downcycled into low-value uses like road backfill. - In line with the European Green Deal, which mandates all new residential buildings be zero-emission by 2030, Dutch policy is increasingly focused on sustainable construction. Innovative projects are exploring the use of bio-based materials like hempcrete and mycelium insulation, as well as piloting the 100% reuse of materials from demolished social housing projects. - Dutch municipalities and urban planners are increasingly using AI and digital twins to enhance decision-making. AI-powered tools are being used to analyze vast amounts of planning documents, while "living labs" in cities test AI applications in real-world environments for functions like crowd monitoring and public safety. - At the EU level, a new European Affordable Housing Plan is anticipated in December 2025 to help national and local governments deliver sustainable housing. The plan will likely focus on building decarbonization, supported by revenues from the new emissions trading system for buildings and transport (ETS2) which begins in 2027. - While U.S. house prices have significantly outpaced those in the Euro Area since the early 2010s, some analysts predict that political uncertainty in the U.S. could drive investment toward European real estate as a perceived safe haven. However, rising interest rates and potential trade tariffs could also dampen European transaction volumes and increase construction material costs.
