Housing — France · Synthesis

A price drop that did not restore affordability. After a decade of continuous increases, prices in the existing-home market fell in 2024 (of the order of −4 to −5% year on year according to the Notaires-INSEE indices). But the sharp rise in mortgage rates cancelled out this gain: households' borrowing capacity fell, and affordability did not improve. The price drop reflects above all a frozen market.

A collapse in construction. Housing starts and building permits fell sharply (SDES), dropping to among the lowest levels in decades, well below estimated needs. The construction sector (development, building) is going through an activity crisis with consequences for employment and future supply.

Record demand for social housing. The number of social-housing applicants exceeds 2.6 million households, against a far lower number of allocations. Waiting times are lengthening, particularly in high-demand areas (Île-de-France, metropolitan areas, the coast). Social-housing construction has also slowed.

Persistent inadequate housing. The Fondation Abbé Pierre estimates the number of inadequately housed people at several million (homeless, in unfit housing, in overcrowding or in a situation of energy poverty). The housing effort rate (share of income devoted to housing) is high for low-income households and private-sector tenants in high-demand areas.

Tenure status and renovation. The homeownership rate (≈ 58%) is in the European average. The energy renovation of the housing stock (MaPrimeRénov', ANAH) is a major undertaking, at the crossroads of housing and the environment; the schedule for banning the rental of "thermal sieves" (energy-performance certificate, DPE) is reshaping the rental market.

The recovery of construction, a condition for easing. Without a revival of new supply and of social-housing production, the tension in sought-after areas will persist whatever the trend in prices. Support schemes (zero-rate loan, taxation of rental investment) and the release of land are at the heart of the trade-offs, in a context of land sobriety (the "net zero artificialization" objective).

Interest rates and solvency. The trend in mortgage rates directly conditions households' purchasing capacity and the recovery of the market. An easing of rates could revive demand; conversely, durably high rates would prolong the gridlock. This is the main cyclical variable.

Energy renovation and the DPE schedule. The progressive ban on renting out the most energy-hungry dwellings and the renovation targets are transforming the stock. The pace and financing of renovation (MaPrimeRénov', ANAH) are debated, between climate ambition and the risk of withdrawing dwellings from the rental market.

Tension between densification and land sobriety. The objective of reducing land artificialization (see the Environment category) requires building more in already-urbanized areas. Reconciling housing production and land sobriety is one of the structuring trade-offs of the decade.

The open questions. Three issues will shape the period: (1) reviving supply (new construction and social housing); (2) restoring affordability in high-demand areas; (3) renovating the stock without reducing the rental supply or worsening inadequate housing.

Placed in its environment, France shares with its neighbours a housing affordability crisis, with a more developed social stock than in several countries but stalled construction and a high effort rate for low-income households.

Three takeaways. (1) Ownership: around the average. The French homeownership rate (≈ 58%) is close to the United Kingdom, above Germany (≈ 47%, the particularity of a large rental stock) and well below Italy (≈ 75%) and the EU average (≈ 69%).

(2) A sizeable social stock. France has a more developed social-housing stock than many neighbours, which cushions the crisis for a portion of households — but demand far exceeds supply, and waiting times are lengthening.

(3) A shared supply crisis. The decline in construction and the deterioration of affordability are phenomena observed in many European countries since the rise in rates; France is not an isolated case, but the scale of the fall in construction is pronounced there.