Nine Percent of New Homes Are Teardowns

In 2021, 9.1 percent of new single-family homes were built in an older neighborhood on a site where a previous  structure had to be torn down and rebuilt, according to the latest Builder Practices Survey (BPS) conducted by Home Innovation Research Labs.  Another 18.5 percent were built on an infill lot in an older neighborhood.  The BPS places new homes built in one of four development categories.  In addition to “teardown” and “infill,” the categories include “new residential development” and ”not in a residential development.”  New homes built not in a residential development in the BPS correspond roughly to the Census Bureau’s contractor-built custom homes, built one-at-a time on the home owner’s lot.  Homes built in a new residential development are by far the most common type.  The entire breakdown is given below:

There is a moderate amount of geographic variation in the share of teardown/rebuilds.  At the high end, about one-in-five (20.1 percent) of single-family homes were built on a lot where a structure had to be torn down first in the Pacific division, followed at a distance by the three divisions on the East Coast: New England (13.6 percent), the Middle Atlantic (12.9 percent), and South Atlantic (11.4 percent).  At the other end of the scale, fewer than 5 percent of new single-family homes represented teardowns in the Mountain (4.7 percent), West North Central (4.3 percent) and West South Central (3.8 percent) states.

As mentioned above, infill development in an older neighborhood (not involving a teardown & rebuild) was about twice as common as the teardowns.  Non-teardown infill development was most common in New England, where it accounted for 35.0 percent of the single-family homes built in 2021.  Non-teardown infill development also accounted for more than one-fifth of new single-family homes in the Pacific (27.5 percent), Mountain (22.6 percent) and Middle Atlantic (20.9 percent) Census divisions.  At the low end of the scale, only 11.5 percent of new single-family homes were built on infill lots in the West South Central.

Although building new homes in new neighborhoods is the most common occurrence, the teardown construction has taken on increased importance, because of the problems that builders have had in obtaining new lots in some parts of the country.