More New Homes Being Built in Established Neighborhoods

One-quarter of newly built single-family detached homes were built in already established neighborhood in 2020.

According to the National Association of Home Builders, via the latest Annual Builder Practices Survey, 19% of new homes were built on infill lots and 6% were built on the property of a home that was torn down. As lot shortages continue to plague construction companies and buyers continue to feel those challenges, NAHB predicts this trend isn’t going anywhere soon. In September, builders reported the worst lot shortage ever since NAHB began collecting this data in the 1990s, when 76% of builders reported that the overall supply of developed lots in their areas was low to very low, up 11% from the previous high of 65% in 2018. Therefore, expect to see more new homes in older neighborhoods as construction ramps up in 2022.

In the Middle Atlantic region, which includes Pennsylvania, new homes in infills or tear-downs represented 39% of new single-family construction in 2020. Thirty-eight percent of new homes are in a new residential development, while 30% are in an infill lot in an older neighborhood and 9% are a teardown and rebuild in an already established neighborhood. Twenty-three percent are not in a residential development. In New England, these new homes represented nearly half (49%) of new home construction, compared to the East North Central, where this only represented 19% total of new construction.

Last year, the majority (63%) of new single-family detached homes built were in new residential developments across the U.S. It is expected that that percentage will drop even further as builders seek places to build new homes.