House prices in the EU were 5.1% higher in the first quarter of 2026 than a year earlier, while rents rose by 3.0%, as pressure on affordable housing continued across the bloc.
Across Europe, the drivers of housing shortages vary by place, including insufficient homebuilding where demand is highest, pressure from short-term rentals in some tourist areas, and ageing buildings in need of renovation, the European Commission informed on Thursday.
Housing costs and living conditions data illustrate the scale of the challenge: EU households spent an average of 19% of their disposable income on housing in 2024, around 17% of people lived in overcrowded accommodation, and 9% could not afford to keep their home adequately warm.
More than one in seven EU residents lived in a dwelling with a leaking roof, damp walls, floors or foundations, or rot in window frames or floors in 2023.
Billions redirected towards housing upgrades
EU cohesion policy funding — an EU programme designed to reduce regional inequalities — has long supported measures such as social housing, neighbourhood regeneration and improving the energy performance of homes, the Commission said.
Of an initial €7.5 billion in EU funding allocated to housing under 2021–2027 cohesion programmes, 86% was directed towards energy efficiency, with funding expected to improve the energy performance of more than 725,000 homes and support the construction or renovation of social housing for almost 59,000 people.
After a mid-term review of cohesion policy in 2025, Member States and regions redirected around €3.3 billion towards affordable and sustainable housing, bringing the overall EU allocation to about €10.5 billion, or €13.8 billion including national co-financing.
The Commission also pointed to growing attention on homes that remain liveable in summer as heatwaves intensify, as well as the need for housing investment that also accounts for climate adaptation and accessibility.
