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TRENDS AND OPPORTUNITIES IN THE U.S. HOME AND
REMODELING MATERIALS MARKET
Pro Dealer Industry SummitOctober 18, 2018
Home Innovation Research Labs Founded in 1964 as wholly-owned subsidiary of NAHB Independent, for-profit researchers assisting development
and commercialization of new building technologies Engineering research & development Market & field research Laboratory testing
Leader in green home building movement (NGBS)
Key role in building codes and standards development
Partnership with ICC-ES to fast-track issuance of ESRs
Annual Building Product Tracking, Custom Market Research Studies
Home Innovation has been tracking annual materials purchases since 1995 Builder Practices Survey of 1,500 U.S. Builders
Consumer Practices Survey of 100,000 households
Decades of custom market research, sponsored by hundreds of building materials manufacturers
Observational research of materials installation issues
U.S. New Housing Mix (based on annual starts)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Apartment/CondoSFD MoveupSFD StarterSFD LuxuryTownhouse/Duplex
Source: Annual Builder Practices Reports and NAHB Housing Starts
Characteristics of New U.S. Homes, 2017 – Size, Price, and Value
Source: Annual Builder Practices Reports
Average Living Area
Average Price
Total Sq.Ft. Added
(millions)Total Sales (billions)
TOWNHOUSE/DUPLEX 1,702 sf $332,742 172 $32
APARTMENTS/CONDOS 1,136 sf $171,149 414 $62
SFD STARTER 1,674 sf $187,728 384 $42
SFD MOVEUP 2,435 sf $356,829 862 $127
SFD LUXURY 3,647 sf $777,181 583 $126
Average Annual Growth Forecast of Housing Starts, 2017 - 2022
SFD Starts MF StartsNEW ENGLAND 2% -1%
MID-ATLANTIC 2% 1%
EAST NORTH CENTRAL 3% 1%
WEST NORTH CENTRAL 2% -1%
SOUTH ATLANTIC 5% 2%
EAST SOUTH CENTRAL 3% 0%
WEST SOUTH CENTRAL 4% 0%
MOUNTAIN 5% 0%
PACIFIC 5% 0%Source: NAHB Housing Starts + Forecast (May 2018)
Shares of New Home Builders Purchasing at Lumber Yards
Source: NAHB HMI Survey, Special Questions Nov. 2015
Remodeling General Contractor responsesin similar NAHB survey mirror this graph.
Shares of Purchase Decisions Made by Home Builder
Source: NAHB Remodeler Survey, 4th Quarter 2015
Single Family Detached (SFD)Above-Grade Wall Construction, 2017
0.1%0.1%0.2%0.2%0.3%0.4%1.3%1.4%2.1%
5.2%9.4%
79.4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Autoclaved aerated concrete Precast concrete
Logs Other concrete or masonry Structural insulated panels
Insulated concrete forms Modular - light frame
Post & beam Poured concrete
Concrete block Panelized - light frame
Site built - light frame
Source: Annual Builder Practices Reports
Trends in SFD Above-GradeWall Construction
91% 89% 87% 89% 86%90% 91% 89% 89% 90%
5% 6%10% 9% 8% 7% 6% 8% 8% 7%
2% 3%1% 1% 2% 1% 0% 1% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Site built Panelized Modular
Source: Annual Builder Practices Reports
2018 Builder Survey on Anticipated Adoption of Labor-Saving Alternatives
Haven't used, Don't plan to
Plan to use it less often
Plan to use it about the same
Plan to use it more often
Roof trusses 12% 6% 65% 17%
Pre-cut framing package 66% 6% 20% 8%
Factory-built open wall panels 67% 8% 20% 5%
Factory-built closed wall panels 73% 7% 18% 3%
Panelized, pre-assembled floors 75% 7% 14% 4%
Modular 77% 6% 13% 4%Turn-key framing 51% 10% 33% 6%Precast floor, wall, or roof panels 73% 6% 18% 4%
Question: CONSIDERING ONLY THE NEW HOMES YOUR COMPANY BUILDS, WHICH OF THE FOLLOWING DO YOU PLAN TO USE LESS OFTEN, ABOUT THE SAME, OR MORE OFTEN IN THE COMING YEAR COMPARED TO LAST YEAR?
Source: Home Innovation Research Labs Survey
2018 Survey of Builders Sheds Light on Labor Saving Alternatives
Haven't used, Don't plan to
Plan to use it less often
Plan to use it about the same
Plan to use it more often
Roof trusses 7% 7% 61% 25%
Pre-cut framing package 53% 7% 26% 14%
Factory-built open wall panels 53% 16% 26% 5%
Factory-built closed wall panels 53% 11% 35% 2%
Panelized, pre-assembled floors 63% 9% 21% 7%
Modular 61% 7% 25% 7%Turn-key framing 40% 14% 37% 9%Precast floor, wall, or roof panels 60% 9% 26% 5%
Question: CONSIDERING ONLY THE NEW HOMES YOUR COMPANY BUILDS, WHICH OF THE FOLLOWING DO YOU PLAN TO USE LESS OFTEN, ABOUT THE SAME, OR MORE OFTEN IN THE COMING YEAR COMPARED TO LAST YEAR?
Large Builders Only—25 or more Starts/Year
Source: Home Innovation Research Labs Survey
Exterior Wall Framing inSFD Homes: 2 x 6 vs. 2 x 4 Studs
Source: Annual Builder Practices Reports
70%63%
71%65%
61%55%
61%62%
56%60%
56%
29%35%
29%33%
38%45%
39%37%
44%40%
44%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2 x 42 x 6
Exterior Wall Framing InMultifamily Homes: 2 x 6 vs. 2 x 4 Studs
59% 60%
51%
49%
54% 51%
45%
41% 40%
49%
50%
46% 48%
54%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
2011 2012 2013 2014 2015 2016 2017
2 x 42 x 6
Source: Annual Builder Practices Reports
Exterior Wall Sheathing Materialsfor New SFD Homes
Includes Primary & Secondary Layers
13% 13% 13% 13% 15%
16% 16%
69% 69% 71% 72%66%
69% 67%
14% 15%13% 13%
17%
12% 14%
4% 3% 3% 2% 2% 3% 3%0%
10%
20%
30%
40%
50%
60%
70%
80%
2011 2012 2013 2014 2015 2016 2017
PlywoodOSBFoamOther
Among foam, Polyiso leads secondary sheathing market, and XPS leads primary sheathing market
Source: Annual Builder Practices Reports
Huber ZIP System/GP ForceField total about 8%
Shares of Insulating Foam Wall Sheathing in New SFD Homes
Source: Annual Builder Practices Reports
5% 6% 5% 4% 5% 5% 5%
5%6%
6% 7%
9%7% 8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016 2017Foam as Primary Layer Foam as Secondary Layer
Exterior Foam Wall Sheathing by Thickness, New SFD Homes
63%52%
35%44% 45%
37% 35%
7%
12%
14%
9%16%
7% 8%
24%26%
44%29%
31%
45%42%
3%9% 2%
10%
4%6% 13%
2% 2% 5% 8% 4% 5% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016 2017
2 inches1 1/2 inches1 inch3/41/2
Source: Annual Builder Practices Reports
Trend in Wall Height of New SFD Homes
Source: Annual Builder Practices Reports
39%35%
31%32%
26%
32%
42%44%
47%45%
51%49%
20% 21% 22% 22% 23%19%
0%
10%
20%
30%
40%
50%
60%
2012 2013 2014 2015 2016 2017
8' or Less8.5' or 9'10' or More
Ceiling Heights inNew SFD Homes, 2017
26%
52%
23%
48%
42%
10%
0% 10% 20% 30% 40% 50% 60%
8' or Less
8.5' or 9'
10' or More
Upper Floors First Floor
Source: Annual Builder Practices Reports
Wood Trusses Trending Upward (Again) in New SFD Homes
Source: Annual Builder Practices Reports
35%39%
41%
47%49%
42%
35%
40%
35% 35% 35% 35%33% 33%
63%61%
56%
50%
46%
55%
63%
55%
61% 62% 63% 63% 64%66%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
Rafters Trusses
Trend in Roof Shapesin New SFD Homes (based on sq.ft. roof footprint)
55% 53% 52% 51% 51%54% 55% 55% 54% 53% 52% 51% 50%
52%
43%47% 46% 46% 45%
42% 42% 42% 44% 43% 44% 44% 45% 43%
2% 1% 1% 1% 3% 3% 2% 2% 2% 3% 3% 3% 2% 3%
0%
10%
20%
30%
40%
50%
60%
Gable Hip Gambrel Flat
Source: Annual Builder Practices Reports
Trend in Roof Shapes in New Multifamily Homes (based on sq.ft. roof footprint)
62%58% 60% 58%
64% 62% 61%58% 58%
56%58% 57% 57%
50%
32%36% 35%
38%
31% 31%34% 36% 36% 35%
32%29% 28%
32%
4% 5% 3% 2% 3% 4% 4% 4% 4%7% 7%
11% 11%
16%
0%
10%
20%
30%
40%
50%
60%
70%
Gable Hip Gambrel Flat
Source: Annual Builder Practices Reports
Roof Sheathing onNew SFD Homes
21%25% 24% 25% 26% 26%
30% 30%
2% 3% 1% 2% 2% 2% 2% 4%
75%71% 73% 71% 71% 71%
66% 65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2010 2011 2012 2013 2014 2015 2016 2017
PlywoodZIP SystemCommodity OSB
Source: Annual Builder Practices Reports
Shares of Structural Floors in New SFD Homes (based on sq.ft. of floor space)
Source: Annual Builder Practices Reports
38% 38%40% 39% 38% 39%
37%36% 36% 37% 37% 36%
35%32%
25% 24%22% 21% 21% 21% 20% 21% 21% 21% 21% 20%
22%24%
26% 27% 27%28%
30%29%
31% 32% 31% 31% 30%32% 32% 31%
10% 9% 10% 10% 10% 10% 10% 10% 11% 11% 12%11% 10%
12%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Concrete Lumber joists Wood I-joists Open-web joists
Floor Joist Depthin New SFD Homes
0%
10%
20%
30%
40%
50%
60%
8 inches 10 inches 12 inches 14 inches+
Source: Annual Builder Practices Reports
Premium & Commodity OSB Subflooring in New SFD Homes, 2017
Source: Annual Builder Practices Reports
Commodity Panels, 29%
AdvanTech (Huber), 34%
EdgeGold (Weyerhaeuser),
24%Pinnacle (Norbord),
3%
Durastrand PointSix (Norbord), 1%
TopNotch 350 or 450 (LP), 8%
Others, 5%
Insulation Usage in New SFD Homes (based on sq.ft. area insulated of walls, floors and roof)
Source: Annual Builder Practices Reports
0%
10%
20%
30%
40%
50%
60%
70%
Fiberglass batt Fiberglass blown Cellulose blown Spray foam Foam board All Others
Spray Foam Insulation Market Shareby Assembly in New SFD Homes, 2017
Source: Annual Builder Practices Reports
2%
6%
8%
9%
11%
12%
12%
14%
15%
24%
26%
31%
0% 5% 10% 15% 20% 25% 30% 35%
Floor Above BasementFloor Above Crawl Space Foundation
Garage CeilingRoof Above Flat Ceiling
All InsulationExterior Wall Cavity Insulation
Basement Wall InsulationGarage Wall Cavity
Roof Above Cathedral CeilingFloor Sound InsulationWall Sound Insulation
Crawl Space Wall
Shares of Housewrap, in New SFD Homes, 2017
Source: Annual Builder Practices Reports
0.1%0.2%0.3%0.3%1%1%1%2%3%3%3%4%
9%10%10%
53%
0% 10% 20% 30% 40% 50% 60%
Kimberly-Clark Tremco Barrier Solutions
Benjamin Obdyke Perma R Products
Grip-Rite James Hardie
REX Wrap Grace
Owens Corning Green Guard
Barricade Building Products DOW
CertainTeed Others TYPAR
DuPont Tyvek
Homes with Housewrap: 78%…with Self-Adhered Wrap: 16%…with Liquid-Applied: 4%
Is the Remodeling Market Opportunity Primarily for Pros or DIYers?DIY Share of Remodeling Materials Purchases
Source: Annual Consumer Practices Reports
18%32%
38%39%
45%47%
50%53%
58%58%
69%
0% 10% 20% 30% 40% 50% 60% 70% 80%
RoofingStructural Walls, Floors & Roofs
CabinetsSiding
Exterior DoorsExterior Decking
Fences/Landscape WallsFaucets
Deck & Porch RailsAppliances
Interior Paint
Residential Roofing: New Homes and Home Replacements/Additions, 2017
(millions of sf)
328
338
1,832
150
252
333
1,048
577
1,615
5,963
4,819
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Composite
Slate
Single Ply
Cedar shingles & shakes
Clay or Concrete Tile
Metal
Asphalt--3-tab
Asphalt--architectural
New Homes
Remodeling
Residential Roofing is about an 18 billion sq.ft. per-year market
Source: Annual Builder & Consumer Practices Reports
Roofing Materials Installed in New SFD Homes
0%
10%
20%
30%
40%
50%
60%
70%
Asphalt--Three TabAsphalt--ArchitecturalWood Shakes/ShinglesConcrete and Clay TileMetalPlastic CompositeOther
Source: Annual Builder Practices Reports
Roofing Material Installedin Home Replacements
0%
10%
20%
30%
40%
50%
60%
Asphalt--Three TabAsphalt--ArchitecturalWood Shakes/ShinglesConcrete and Clay TileMetalPlastic CompositeOther
Source: Annual Consumer Practices Reports
Siding in New SFD Homes
Source: Annual Builder Practices Reports
0%
5%
10%
15%
20%
25%
30%
35%
Vinyl & PolymerFiber CementEngineereed WoodStuccoBrickStoneNatural Lumber
Siding in Home Remodeling
0%
10%
20%
30%
40%
50%
60%
70%
Engineered WoodNatural WoodBrick & BlockStoneStuccoVinyl & PolymerFiber CementMetal and Other
Source: Annual Consumer Practices Reports
New Home and RemodelingWindow Installations, 2017 (1000’s)
494
1,214
1,710
1,093
4,951
1,313
2,740
2,117
2,388
2,170
5,254
6,962
3,640
8,097
2,191
3,364
2,700
4,081
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
New EnglandMid-Atlantic
E N CentralW N Central
S AtlanticE S Central
W S CentralMountain
Pacific
New Home Windows Home Remodeling Windows
An estimated 58 million windows were installed in residential properties in 2017
Source: Annual Builder & Consumer Practices ReportsSource: Annual Builder & Consumer Practices Reports
Trends in New SFD HomeWindow Frame Materials
52% 50% 50% 48%
60% 60%64% 65%
67% 66%
60%
65%68%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Wood (no cladding) Wood, aluminum clad Wood, vinyl clad Aluminum Vinyl Composite or fiberglass
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Window Purchases byNew Home Price-Point
20%
13%
39%
13%
4%7%
65%
79%
46%
2% 3%8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Starter Moveup Luxury
WoodAluminumVinylComposite & Other
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
New Home Window Purchasesby Size of Home Builder
37%
23%
13%9% 7%
4%
47%
65%
81%
7% 5%1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Builds 1 - 10Homes/Year
Builds 11 - 50Homes/Year
Builds 51+Homes/Year
WoodAluminumVinylComposite & Other
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Trends in Home RemodelingWindow Frame Materials
0%
10%
20%
30%
40%
50%
60%
70%
Wood
Aluminum
Vinyl
Composite &Other
Source: Annual Consumer Practices ReportsSource: Annual Builder Practices Reports
Exterior Door Purchases inNew Homes, 2017 (thousands)
253
293
673
149
100
570
218
786
0 500 1,000 1,500 2,000
Other
Wood -- raised panel
Wood -- flush
Steel -- raised panel
Steel -- flush
Fiberglass
Front Entry Other Entry
An estimated 8 million entry doors were installed in residential properties in 2017 (new homes + remodel) and 3 million in new homes.
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Exterior Entry Door Purchase Trends, New Homes
13% 12% 13%16%
11%8%
13%12%
15% 15%17%
14%13%
4% 3% 4%7%
3% 3% 3% 3% 4% 4%6%
4% 5%
44%42%
40%38%
36%40%
35% 35% 35%32%
30%32%
27%
8%7% 6%
5% 6% 6% 5%7%
4%
7%5% 6%
8%
30%
36% 36%33%
42% 41% 42% 41% 40% 40% 41% 42%
46%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Wood -- raised panel Wood -- flush Steel -- raised panel Steel -- flush Fiberglass
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Front Entry Doors, New U.S. Homes 2017
Wood --raised
panel, 19%
Wood --flush, 4%Steel -- raised panel, 22%
Steel --flush, 2%
Fiberglass, 50%
Other, 2%
Source: Annual Builder Practices Reports
Other Entry Doors, New U.S. Homes 2017
Wood --raised panel,
8%
Wood --flush, 5%
Steel --raised panel,
31%Steel --
flush, 12%
Fiberglass, 42%
Other, 1%
Source: Annual Builder Practices Reports
Front Entry Doors by Builder Size, New SFD Homes, 2017
32%
23% 25%22% 23%
10%
44%
53%
65%
0%
10%
20%
30%
40%
50%
60%
70%
BUILDERS OF 1-10HOMES A YEAR
BUILDERS OF 11-50HOMES A YEAR
BUILDERS OF 51+HOMES A YEAR
WoodSteelFiberglass
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Front Entry Doors by Price-Point of New SFD Homes, 2017
17%
25%
40%
25%
16% 14%
58% 58%
43%
0%
10%
20%
30%
40%
50%
60%
70%
Starter Move-up Luxury
WoodSteelFiberglass
Source: Annual Builder Practices ReportsSource: Annual Builder Practices Reports
Front Entry Doors,Home Repair & Remodeling, 2017
0%
10%
20%
30%
40%
50%
60%
WoodSteelFiberglass
Source: Annual Consumer Practices ReportsSource: Annual Consumer Practices Reports
Other Entry Doors,Home Repair & Remodeling, 2017
0%
10%
20%
30%
40%
50%
60%
70%
WoodSteelFiberglass
Source: Annual Consumer Practices ReportsSource: Annual Consumer Practices Reports
Decking Volumes by Material Typein New Homes and Remodeling, 2017
0 100 200 300 400 500 600 700
Treated lumber
Cedar
Redwood
Other untreated lumber
Plastic composite
PVC & other plastics
New Homes Remodeling
(Millions of Sq.Ft.)
About 1.2 billion square feet of decking was installed on residences in 2017, ~85%for remodeling
Source: Annual Builder & Consumer Practices Reports
Shares of Raised Porch and Decking Material in New SFD Homes
40%
17%
35%
7%
0%
10%
20%
30%
40%
50%
60%
70%
Treated WoodUntreated WoodCompositePVC
Source: Annual Builder Practices Reports
Shares of Raised Porch and Decking Material in Residential Remodeling
50%
23%
17%
2%0%
10%
20%
30%
40%
50%
60%
2011 2012 2013 2014 2015 2016 2017
Treated lumberUntreated LumberCompositePVC & Other Plastic
Source: Annual Consumer Practices Reports
THANK YOU
Home Innovation Research Labs400 Prince George’s Blvd |Upper Marlboro, MD 20774
P: 301.430.6194 | F: 301.430.6180HomeInnovation.com
Ed Hudsonehudson@homeinnovation.com
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