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You can replace a house to the extent that the old residents are happy with the new house. You can't really replace a deceased family member with someone else.

I'm pretty sure more than 1.7M houses get built every year worldwide.

If you count "dwellings" or "housing units" then surely yes. Many/most of those will be apartments and multi-tenant buildings rather than houses per se.

And then there are all the "houses" built from salvaged materials in poor countries. Not sure if you'd want to count those. A person living in such a structure would still be considered homeless in many places.

Where did you get these numbers?