Builders Make Room in Existing Neighborhoods

A picture of the exterior of a small building under construction.

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Builders, facing lot shortages at a time when buyer demand is high, are turning to any space they can find—even space that is currently occupied by an older home.

About a quarter of new single-family homes are being built in already established neighborhoods as either an infill or teardown, the National Association of Home Builders reports. Homes built on infill lots in older neighborhoods comprise the majority of those, at nearly 19% of new homes, builders say.

Builders have reported a record high of lot shortages. As such, the number of new homes constructed on infill lots will likely continue to increase, builders say.

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The highest shares of homes built on infill lots are in New England (34.6%), the Mid-Atlantic (30%), and the Pacific region (24.1%). The Midwest has the fewest.

Teardowns, meanwhile, are highest in New England (14.4%), Pacific (13.4%), and the Mid-Atlantic (9.3%) regions. The fewest teardowns are in the Mountain region (3%).

While builders search for space, the majority of newly built single-family homes—63%--are still built in new residential developments.