Is This the Slow Death of the American Basement?

Bye, bye, basement. Rising material costs and changing demographics are transforming the construction landscape, and the basement is on the chopping block. Even finished basements add relatively little value compared to other rooms of the home, so to save costs many builders are forgoing basements for slab foundations—mostly in areas outside of the traditional basement strongholds of the Midwest and New England. But the cost is not the only factor leading to the loss of basements: It is also a result of the changing fabric of building itself as construction moves south and west, where slab basements are favored. 

The basement is losing favor among home builders and buyers. But why?

Fewer than a quarter (24.3 percent) of single-family homes built in 2018 have basements, according to NAHB analysis of data from the U.S. Census Bureau’s Survey of Construction in a recent Eye on Housing blog post. This is down sharply from the 36.8 percent of homes built in 2000 with basements, and the decline has been steady over the past two decades.

Over the same period, the share of homes built with slab foundations grew from 46 percent to 60.1 percent.

There is, of course, massive regional variation in the adoption of basements, with more than 80 percent of homes built in 2018 in the West North Central census division and nearly 70 percent of New England homes built on basements. In sharp contrast, 97 percent of homes built in the West South Central division were built on slab foundations.

Much of the single-family home production since 2000 has shifted from northern areas where basements are popular (and in some cases, necessary) to southern and western states, where they can be impractical. But even in three of the areas where basements are most popular (New England, Middle Atlantic and East North Central) there were declines in 2018.

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