It is surely within the realm of possibility that someone could intentionally torch their own home. Let’s be honest and admit that even if it did happen, we are likely talking about a very limited number of instances, like one or two in the entire county if any at all.
Big picture impact on the housing market and economy, I have to think that the net will be negative considering the costs of fighting the fire, the losses that individuals will face even if they get an insurance payment, and the impact it will have on insurance premiums and the fear people will have about buying in fire prone areas. Of course, there will be more work for builders and money from insurance payments will lift up the housing related industries, so who knows.