He seizes old American dwelling (5)
I believe the answer is:
house
'dwelling' is the definition.
(I know that house is a type of dwelling)
'he seizes old american' is the wordplay.
'seizes' is an insertion indicator.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'american' becomes 'us' (abbreviation for United States).
'o'+'us'='ous'
'he' placed around 'ous' is 'HOUSE'.
(Other definitions for house that I've seen before include "Domestic building" , "Building for dwelling in" , "Inn" , "SECOND PART OF 19" , "Firm; home" .)