Dutch housing market cools off: Fewer mortgage applications, higher  interest rates

The Dutch housing market is cooling down. After years of strong price increases, the rise in home prices is slowing down. According to ABN Amro, this is due to a declining demand for homes caused by higher mortgage interest rates. In the second quarter of 2026, De Hypotheker recorded the first decrease in mortgage applications in three years. The number of applications dropped by 3 percent compared to Q2 of 2025.

ABN Amro expects home prices to increase by 3 percent in 2026 and by 4 percent in 2027. “Due to declining demand and higher mortgage rates, house prices are rising less sharply,” the bank said in its latest Housing Market Monitor.

Mortgage interest rates have been rising since early 2025, resulting in buyers being able to borrow less. That, in turn, has decreased the demand for homes. “First-time buyers, in particular, are noticing this. They often already have to borrow almost the maximum amount. Consequently, they are less able to absorb price increases with a higher mortgage,” ABN Amro said.

The bank expects wages to increase this year and next, but not enough to offset the increase in mortgage interest rates. Economic uncertainty also causes home buyers to be more reluctant to dip into their savings. “As a result, households are becoming more cautious with major purchases, such as a house.”

Mortgage advisor De Hypotheker recorded a 3 percent year-on-year decrease in the number of mortgage applications in the second quarter of this year. The decrease was mainly in applications for renovations, refinancings, and sustainability measures. The number of applications for purchasing a home remained stable, but only due to more applications by young first-time buyers under the age of 25 and existing homeowners under the age of 35. The number of applications to buy a home declined in all other age groups.

Young first-time buyers under the age of 25 are still benefiting from landlords selling off cheaper rental properties due to stricter regulations and tax changes, De Hypotheker said. As a result, the number of applications from this group of home buyers nearly doubled, increasing 96 percent year-on-year.

In the age group 25 to 35, mortgage applications for buying a home dropped by 2 percent. “Within this group, there is a striking difference between first-time buyers and home movers,” De Hypotheker said. Among first-time buyers, the number of applications fell by 7 percent, while applications from people moving up the property ladder increased by 17 percent.

“Although home prices have risen by 4 percent since last year, the housing market has been cooling down for some time,” De Hypotheker said. In the second quarter, the average mortgage amount was €365,850, only 1 percent higher than a year earlier.

ABN Amro stressed that while the housing market is cooling, home prices won’t fall because the housing shortage remains significant. “In short, higher mortgage rates curb demand, but due to the housing shortage, homes remain expensive,” ABN Amro said.