Several cities, seeing wood as a fire risk, even until this day have rules that forbid new wooden construction.
Then there's also the fact that streets are organised in a totally different way in many European cities. US visitors sometimes tell me they feel a bit claustrophobic in the streets of my native city. They _are_ quite a bit narrower than the average US street, and they're all townhouses built right next to one another.
Oh, and older generations seem to spontanuously associate wooden barracks with soldiers, prisoners of war and cheap post war emergency housing.
The tide is turning though, with wood and even straw building gaining in popularity year by year in many of the EU countries that I regularly visit...
I live in northern England at about 1000' (fairly high by english standards). It rains a lot, and the rain tends to be more horizontal than vertical. Outside, untreated wood rots fast from the damp. Treated wood (e.g. windowframes) need repainting every 2nd year, and even so parts of them rot and need replacing every 25 years or so.
The houses near here are mostly 200-400 years old and built of local gritstone from quarries that are a few hundred yards away. The walls are as good as when they are built (the exteriors need re-pointing every ~40 years or so). The roofs (grey(stone) slate) need re-doing maybe every ~40 years when the timbers sag.
The buildings I have made (house extension, outbuildings) will still be standing 400 years from now.
The comments about shortage of timber might also have some validity - there were/are hardwoods here, but not much - unlike in the US or New Zealand, where you had large forests on your doorsteps.
[1] http://www.theguardian.com/cities/2015/sep/10/metroland-100-...