Exterior Materials Trends from Annual Builder Practices Survey

With new single-family housing starts up 16 percent from the previous year, 2013 brought some needed relief to a beleaguered industry. As if thumbing their noses at the “not so big” home trend, average single-family home sizes were up across all price-point categories (starter, move-up, and luxury) to reach a historic high of about 2,550 square feet. An additional boon was a shift in the price point mix from starter homes to move-up homes. The share of luxury homes declined slightly from 19 to 18 percent of the single-family market in 2013.

So what changes in material usage patterns do we anticipate given this backdrop? A boost in mid-grade materials over low-end materials, and perhaps a minor softening of the high-end stuff. But to complicate things, not all areas of the country grew at the same pace. Growth in much of California and Florida, for example, outpaced the rest of the country, and now new homes in these areas make up a greater proportion of the national totals—which means the “average” new U.S. home is just a little more like a California or Florida home.

After comparing data from the 2013 Annual Builder Practices Reports to the previous year, what we saw largely met our expectations—geographic and price-point changes were noted throughout. However, there were a few surprises that may signal some fundamental changes in builder preferences for new home materials. Let’s start with trends we saw in exteriors.

Roofing

• Asphalt shingles still dominate with about 77 percent of total new home roofing, slipping from 81 percent in the previous year. Three-tab asphalt shingles, the lower cost alternative, now represent only about one-sixth of asphalt shingles on new single-family homes, continuing to lose share to architectural shingles.
• The decline in the asphalt shingle share is not necessarily bad news for the asphalt shingle industry; it’s just a sign that the California and Florida markets, which traditionally favor clay and concrete tile roofs, grew at a faster pace than the rest of the country.
• Combined concrete and clay tile roofing now represents 13 percent of new single-family homes in the United States, up from about 6 percent in 2008.
• Despite metal roofing’s growing popularity as a home replacement roofing material, demand for metal roofs on new homes remains stable.
• Plastic composite shingles, the newcomers in the group, still haven’t made enough inroads into this market to show up as more than a blip in our most recent data.

Exterior Wall Finishes

• Fiber cement had its best showing at 18 percent of all new home exterior wall finishes, up from 16 percent the previous year, which may signal growth potential for this category.
• Stucco saw an uptick from 17 to 19 percent – another reflection of the improving Florida and California markets.
• Brick shares slid from 19 percent in 2012 to 16 percent in 2013, but much of the decline can be attributed to the rest of the country growing faster than an already-strong housing market in Texas, where brick is very popular.
• We would normally have predicted vinyl/poly siding shares to fall, due to the decline in starter homes and the strength of the stucco-dominated markets, but it remained flat.
• Wood-based siding and stone also saw little movement in 2013.

Trim & Fascia

• Wood-based products still lead the new home trim and fascia market with a little more than 40 percent, with engineered wood growing at the expense of lumber.
• Aluminum wrap held about a third of the fascia market.
• Plastic and plastic composite were fairly stable at about 20 percent of trim and 10 percent of fascia shares.
• Fiber cement represents about 12 percent of the trim market and 8 percent of the fascia market according the latest ABPS—down somewhat from the previous year.

Overall, the market for building products allowed for virtually all product categories to see an increase in total sales. Sometimes a growing market, however, can mask market share losses to competitors, and disproportionate growth (or decline) between regions can further cloud the view of market performance.

The solution? Study markets at a regional and local level. Home Innovation Labs conducts the Builder Practices Survey each year on 42 product categories to allow for geographic analysis of building materials purchases.

Feel free to contact me to share insights into tracking this market.

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