Home Innovation Research Lab’s (HIRL) 2019 Annual Builder Practices Survey of home builders had more than 1,600 participants this year, completing the detailed questionnaire on the homes they built in 2018. This study helps us track—and predict—trends in the popularity of home styles, features, and materials used.
One category, thermal insulation, is not as predictable as some other categories. The adoption of more stringent energy codes is widening, home buyer demographics are beginning to favor smaller homes (and smaller budgets for energy bills), and labor and material price increases are putting pressures on home builders to seek lower-cost alternatives. In the current industry environment, higher performing insulation yet more budget-friendly is the ideal recipe for success. These factors seem to be tugging the market in different directions, so getting an early read on the course of new insulation market demand is key to staying one step ahead.
Based on the latest survey results, fiberglass insulation solidly remains the most popular insulation material used in the construction of new homes. Considering all areas of new single-family homes—floors, walls, and roofs—fiberglass batt insulation now comprises about 52% and blown fiberglass represents 19% of installations. Shares of batt and blown fiberglass have been fairly static over the past few years as well.
Foam board and spray foam represent nearly a quarter of the insulation usage in new single-family homes. Foam board share is inching ahead, and spray foam saw a 2 percentage point uptick in 2018 over the previous year. On the other hand, cellulose has seen a substantial decline in market share in new homes over the past few years.
Insulation Decision Dynamics
The performance vs. value trade-off in the decision to specify insulation materials is often discussed among home builders. Some would use a full-cavity fill of foam insulation if the cost were lower. Some believe fiberglass provides the best bang for the buck, but if they’re looking for higher energy performance, they will put their money into other areas of their homes, like more energy-efficient windows and HVAC systems.
The 2019 Builder Practices data reveals that builder insulation preference differs by geographic area, price-point of home, and size of the home building firm. Much of predicting the future of the insulation market rests on tracking housing activity by geographic area and home buyer demographics. For example, fiberglass batt has its deepest market penetration in Pacific states and lowest in West South Central states. Smaller builders (10 or fewer starts per year) are three times as likely to use spray foam than larger builders (more than 50 starts per year). The reverse is true for fiberglass batts—larger builders are more likely to use them.
Difference in insulation usage was less stark among starter, move-up, and luxury homes than comparing by builder size. Nonetheless, spray foam was about twice as likely to be used in luxury homes than in starter or move-up homes. Also, fiberglass batts and blown are somewhat more likely to be put in starter homes than in luxury homes.
For more results from Home Innovation’s latest Annual Builder Practices Survey, visit homeinnovation.com.