Our house is 7 years old and we live in New Mexico. A year ago we began to notice diagonal cracks in our drywall from the top corners of windows and doors and cracks in our stucco outside. Then one day two of our windows cracked (double pane windows, interior glass only cracked) for no apparent reason. We contacted our builder, who sent out a structural engineer come and look and his findings were that the cracked windows were weather realated and that the cracks in drywall and stucco were to be expected.

About a year later we finally got around to replacing the cracked windows. The window installer could not get the windows out and had to cut the new windows in order to get them to fit. His comment was that our house has shifted. Shortly after the windows were replaced (within a month), we have horizontal cracks in our drywall, our window sills have pulled out of place, our window frames on several windows are pulling away from the house frame, all the drywall cracks that were fixed a year ago have returned, we have new vertical cracks running along the window frames, cracks in our ceilings, cracks in our garage floor have gotten bigger. We contacted our builder once again, and they sent out the same 80 year old structural engineer to look at our house. This guy walked in the house, looked at a couple of cracks and said this is not structural, its your house settling. He also made a comment that our house has probably settled about 1 inch, and said a lot of what we are seeing is weather related and/or due to poor construction.

My questions are: If the house is settling, how bad is that? Every day we are seeing something new (new cracks, new windows pulling out, new problems with stucco). When will it stop and what can we do about it? How are structural inspections usually done? This guy didn't take a single picture, didn't write a single note, never pulled out any tools, etc.

Your house is settling that's for sure. In that process you might find an occasional drywall crack. Nothing like what you describe. Yes, I believe that a house is expected to settle about one inch, in about 100 years. I would be willing to bet that you don't know for a fact that the individual the builder sent was in fact a structural engineer. Just some on who works for the builder. Is it logical that windows will crack from weather related conditions, come on? Get your own professional builder or engineer.

He was right that it is due to poor cconstruction, poor construction of the foundation.

You better get you a good lawyer to help you sue the builder. This stinks to high heaven.
Your builder is and will continue to lye to you as long as you will believe what you are being told. The time to take action is right now!!

You may also want to contact your neighbors and see if they are having the same problem. One of our suburban communities in Western New York was having similar problems to what you're describing. They ended up going after the builder for building homes on unsafe foundations, and a lot of the homeowners got nice settlements from the builder for negligence. Not suggesting this is the same as your case, but just another point of view.

Yes logic dictates exactly what the above posts state,go to the county/perish offices and ask them what to do about excessive settling of your home, they should have people on their payroll and reputable engineers to contact about your problem.