Comparing housing market challenges in Ireland and the United States.
At opposite ends of the Atlantic, the United States and Ireland operate vastly different housing systems in terms of scale, structure and geography. One is a continental-sized market with more than 330 million people and dozens of high-growth regions. The other is a smaller (~5.4 million people), highly concentrated economy where housing performance is heavily influenced by a handful of urban centres.
Yet strip away the differences in size, and a striking reality emerges: both countries are facing many of the same housing challenges – and neither has found an easy solution.
For Irish developers, contractors, policymakers and investors, understanding what is happening in the U.S. housing market is more than an academic exercise. It offers a real-time case study of how supply constraints, cost pressures and policy decisions play out in a large, complex system. In many ways, the U.S. experience reinforces a central lesson: housing shortages are rarely caused by a single issue, and they are never solved by a single fix.
Demand Is Not the Problem
In both the United States and Ireland, demand for housing remains strong. In the U.S., population growth, internal migration, and years of underbuilding following the 2008 financial crisis have created a persistent need for new homes. Household formation has continued, even as affordability has tightened.
Ireland faces its own version of sustained demand, driven by population growth, inward migration, and a backlog of unmet need. Younger households, in particular, have faced prolonged delays in accessing home-ownership.
The key takeaway is simple: in both markets, there is no shortage of people who need housing. The constraint lies in the system’s ability to deliver supply at scale.
Affordability Pressures Are Intensifying
Affordability has become the defining issue in both countries, though the mechanics differ slightly. In the United States, the rapid rise in mortgage interest rates over the past several years has significantly increased monthly payments. 30-year fixed mortgage rates in the U.S. are currently around 6.4%. Even where house price growth has moderated, the cost of financing has pushed many buyers to the sidelines. This has had a direct impact on housing activity, particularly among first-time buyers.
In Ireland, affordability pressures stem from a combination of high purchase prices, elevated rents and deposit requirements. While lending rules have helped prevent excessive risk, they have also highlighted the gap between income levels and housing costs. Current fixed mortgage rates in Ireland are around 3.5%. In both countries, affordability challenges are delaying household formation, extending reliance on rental accommodation, and increasing political pressure for intervention.
Supply Remains Structurally Constrained
Both markets are struggling with insufficient supply, but the reasons behind that constraint differ in important ways. The United States has a large housebuilding industry capable of producing significant volumes of housing when conditions allow. However, output is constrained by factors such as high interest rates, labour shortages, zoning restrictions and land availability. According to the U.S. Census Bureau, total housing starts in 2025 was 1.4 million (1m Single Family and 416,000 Multi-Family).
Ireland’s supply challenge is more acute due to its smaller scale and more concentrated development pipeline. Financing, planning delays and infrastructure limitations can have a disproportionate impact on national output. According to Central Statistics Office, Ireland’s housing completions for 2025 was 36,300.
What both markets share is a fundamental imbalance: demand continues to outpace supply, and the system has not been able to close that gap consistently.
Planning and Regulation: Different Systems, Similar Outcomes
Planning systems play a critical role in shaping housing supply in both countries.
In the United States, zoning laws are typically controlled at the local level. Many cities and suburban areas maintain low-density zoning, limiting the construction of apartments, townhouses or smaller-format housing. Community opposition to new development – often referred to as “Not In My Back Yard” (NIMBY) can further delay or block projects.
Ireland operates under a different planning framework, but the challenges are familiar. Developers frequently cite lengthy approval timelines, appeals processes, judicial review risks and infrastructure constraints as barriers to delivery.
In both markets, delays translate into higher costs, increased uncertainty and reduced housing output. The specifics may differ, but the impact is the same.
Construction Costs and Labour Shortages
Rising construction costs have become a major issue on both sides of the Atlantic. In the U.S., builders continue to face elevated costs for materials such as timber (due to transportation costs), steel, concrete, mechanical systems, appliances, and more. Labour shortages in key trades – carpentry, electrical, plumbing and HVAC – have also pushed wages higher and extended build timelines.
Ireland is experiencing many of the same pressures. The cost of materials, labour and compliance has increased significantly in recent years. In addition, the availability of skilled trades remains a major constraint, particularly given competition from infrastructure and commercial projects. For developers, the combination of high costs and constrained labour supply limits how quickly projects can move from planning to completion.
Land Availability and Development Viability
Land availability is another shared challenge, though it manifests differently in each market. In many U.S. metropolitan areas, developable land near employment centres, transport links and established communities has become scarce. This drives up land prices and often forces builders to focus on higher-value homes to maintain profitability.
In Ireland, land constraints are particularly acute in Dublin and other high-demand urban areas. The cost of land, combined with infrastructure requirements and planning uncertainty, can make it difficult to deliver lower-cost housing. In both markets, land economics play a critical role in shaping what gets built – and at what price point.
The Impact of Interest Rates and Financing
Financing conditions are a key driver of housing activity. In the United States, the prevalence of long-term fixed-rate mortgages means that many existing homeowners are locked into lower rates secured in previous years. This has reduced resale activity, as households are reluctant to move and take on higher borrowing costs.
Developers, meanwhile, are facing higher costs for construction and development loans, which can limit new project starts. Ireland operates under a different mortgage structure, but the influence of European Central Bank rate movements has similarly affected affordability and financing conditions. In both markets, higher interest rates have acted as a brake on housing activity.
Rental Market Pressures
Rental markets in both countries are under strain. In the United States, rents surged in many regions before moderating in some areas due to increased apartment supply. However, affordability remains a concern, particularly in high-demand urban markets.
Ireland’s rental market continues to experience significant pressure, with limited supply and strong demand driving high rents and low vacancy rates. The lack of available rental accommodation has become a central political issue.
For both countries, the rental sector is no longer a secondary consideration – it is a core component of the housing system that requires careful policy attention.
Scale and Flexibility: A Key Difference
One of the most significant differences between the two markets is flexibility. The United States benefits from geographic diversity and mobility. Population and investment can shift between regions in response to affordability, job growth or regulatory conditions. Builders can allocate capital to faster-growing markets, helping to balance supply and demand over time.
Ireland has less flexibility. Its smaller size and concentrated urban structure mean that supply constraints in key areas, particularly Dublin, have a more immediate and widespread impact. This makes coordinated planning and regional development strategies especially important in Ireland.
What Can Be Learned?
Despite their differences, both markets offer valuable lessons. The United States demonstrates the importance of scale, a strong private-sector building industry and the ability to respond to regional demand shifts.
Ireland highlights the role of coordinated policy, the importance of infrastructure investment and the need to treat housing as a critical component of economic development.
Both markets would benefit from:
- Faster and more predictable planning processes
- Increased investment in skilled labour and training
- Greater use of modern construction methods, especially components
- Improved alignment between policy objectives and market realities
- A stronger focus on delivering entry-level and affordable housing
The Bottom Line
The housing markets in the United States and Ireland are very different in size, structure and operation. However, they are confronting the same fundamental challenge: strong, sustained demand colliding with limited, constrained supply.
In both countries, the barriers to increased housing delivery are complex and interconnected. Interest rates, construction costs, labour availability, land economics and planning systems all play a role.
For Irish industry professionals, the U.S. experience offers a valuable perspective. It shows that even in a large, well-developed housing market, increasing supply is not straightforward.
Ultimately, the lesson is clear: solving housing shortages requires more than demand – it requires a system capable of delivering supply efficiently, consistently and at scale.
Mike McDole has 40+ years’ experience in the Lumber & Building Materials Industry in the USA and is the
principal of Firing-Line LBM Advisors (outside of Boston, Massachusetts). He helps LBM dealers of all sizes with management strategies, sales strategies, salespeople, gross margin improvement, profit improvement, and more. He can also help Hardware and LBM Dealers in Ireland.
Mike can be reached at Ph. 001.774.372.11367 or at Mike@FiringLineLBM.com
