Almost 80,000 Starts Last Year were Tear-Downs

Although tear-downs can be flashpoints for public opinion, there is scant statistical evidence of their real impact on the new homes market.

The Census Bureau doesn’t specifically track new homes constructed on sites where a previous residence was torn down or where there is evidence of a previous residential structure.

To fill the data void, NAHB polled members earlier this year about tear-downs via its monthly NAHB/Wells Fargo Housing Market Index survey. Based on those responses, NAHB economists estimate that about 10.2 percent of single-family starts in 2016 — about 79,300 homes — were tear-downs. That is significantly higher than the 55,200 tear-downs that NAHB reported in 2015 when they accounted for about 7.7 percent of single-family production.

That increase mirrors the continued recovery of the single-family housing market, which recorded about a 10 percent increase in single-family starts in 2016. It may also reflect a shortage of developed lots which builders are facing in many markets.

More than 40 percent of the tear-downs last year — 33,400 homes — were in the West. About 30 percent, or 23,800 homes, were in the South. The Northeast accounted for 9,800 homes, or about 12 percent of the total. About 15 percent of all tear-downs, or 12,300, were recorded in the Midwest.

Read the full report in NAHB’s Eye on Housing blog.