To have it count as demolishing a house, you must shoot out the surrounding walls with explosives(i.e. grenade launchers/rocket launchers/etc). Then the building will make a noise as if massive amounts of metal were bending, and the roof will collapse onto the ground. This counts as a building being "Demolished." You do not have to cause the buildings to collapse, but if they do collapse while you’re running through your mission, it will count towards this achievement.
If you by some chance haven’t unlocked this on your first play-through, load up the level "Heavy Metal" and use the UAV to destroy the buildings around the enemies. Rinse and repeat until you have this unlocked.
I read this somewhere, used it, and it worked.... When you get to the level "Heavy Metal" on the windmill farm, there will be a part when you are in a UAV. There are just over 12 houses here and most go down in one hit from the UAV, some will take 2. Be sure to take out the guys on the roof tops first so they don't shoot you down. Once you demolish all the buildings, pause the game and reload the check point. It will keep your stats and you can take down another 10 houses