Typically the adult beetles lay eggs on, or just under the surface of, a timber item. The resulting grubs then feed on the timber causing both structural and cosmetic damage, before pupating and hatching as beetles which then breed, lay eggs, and repeat the process causing further damage.

For an infestation to develop it typically requires that timber or wooden items contain a higher moisture content than is normally found in timber or wooden items in a typical home.
A building with a woodworm problem in the structure or furniture probably/possibly also has a problem with excess damp. The issue could be lack of ventilation in a roof space or floor void, penetrating damp, rising damp, condensation or pipe leaks.