What to do About Rising Lumber Costs? Consider using Polyiso Insulation in place of OSB as sheathing.

It’s a classic tale of supply and demand, and it is negatively impacting builders and homeowners alike. During the spring of 2020, low interest rates and a sharp increase in single family housing starts led to a boom in the residential housing market.  The increase in new home construction resulted in an upsurge in demand for lumber; however, supply decreased. During the early stages of the pandemic, lockdown orders slowed or halted production in many sawmills, causing some to shut down temporarily or permanently. Increased safety protocols also slowed production as employee numbers were reduced in facilities. Additionally, several countries worldwide experienced devastating wildfires, which caused substantial loss to forests and vegetation. These problems have culminated in soaring lumber prices, hurting both builders’ and homebuyers’ pockets. According to an April 2021 analysis by the NAHB Economics Team, lumber prices have tripled over the past year, “causing the price of an average new single-family home to increase by $35,872.”¹

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The price surge and material shortage have prompted lawmakers to reach out to President Biden and the Department of Justice to intervene.² However, with no clear solution on the horizon, what alternatives do builders and homeowners have? When it comes to the sheathing, there is a substitute for oriented strand board (OSB) that can save money while providing a more energy-efficient home to the homeowner: polyisocyanurate (polyiso) continuous insulation.

The Polyiso Advantage

Atlas EnergyShield® Continuous Wall Insulation products are made with a closed cell polyiso foam core, which offers the highest R-value with minimal material thickness compared to other insulations. The product is traditionally installed on the exterior of the OSB sheathing. However, depending on the size and shape of the house, much of the OSB sheathing can be eliminated and replaced with polyiso continuous insulation by pairing with a combination of corner bracing and/or metal strapping in order to meet most building codes. Additionally, you can use polyiso thickness of ½” to 2” or more, allowing you to greatly increase the energy efficiency of the home.

While it may seem like a new approach, using polyiso in place of OSB was common practice until recent years when OSB and plywood prices made them the more affordable option. And with the price of lumber soaring 250% in the last year, there is no better time to utilize a trusted construction method like polyiso insulation to increase energy efficiency, enhance building performance, and save money and time.

These renderings are for illustration purposes only.
These renderings are for illustration purposes only.

Let’s explore the benefits.

R-value: A 2020 survey conducted by NAHB found that of the many green building benefits available to homeowners, energy efficiency ranks highest on their list of most desired values. Many homeowners will request items like LED lighting or ENERGY STAR appliances to help reduce energy consumption. However, one of the most significant contributors to energy efficiency is continuous insulation. Atlas EnergyShield has an R-value of more than 6 per inch and greatly reduces thermal bridging in a home, limiting the workload of HVAC systems, lowering utility bills and creating a more comfortable indoor environment year-round. Continuous insulation may not be as exciting as new appliances, but it does provide a greater, longer-term value to a homeowner.

Given the volatile price of lumber, there has never been a better time to improve the performance of new construction homes more cost-effectively. Not only will a home using polyiso as sheathing cost less to construct, but the thermal performance and benefits of using an energy-efficient solution will last the lifetime of the home – much longer than the refrigerator or lighting.  Additionally, upgrading to continuous insulation can only be done during the construction phase of the home, or during deep retrofitting, whereas things like lighting and appliances can easily be upgraded at any time.

Weather-Resistant Barrier (WRB): Traditionally, the WRB is attached to the OSB, but how will a builder install a WRB if the OSB sheathing is removed? Polyiso insulation can be used as an approved WRB meeting IRC requirements. When taped correctly at the joints and penetrations, Atlas EnergyShield®  functions as the WRB and drainage plane, preventing water intrusion at the outermost surface, and can serve as the air barrier.  Additionally, OSB is an organic-based material, meaning if it gets wet, it can contribute to mold growth and the potential for rot. Replacing OSB with Atlas EnergyShield®, which is certified mold resistant, helps to decrease the potential for rot, mold, and mildew which can contribute to health complications.

Availability: Unlike OSB, polyiso insulation has not experienced material shortage, meaning builders and contractors can expect to receive orders on time to help keep construction schedules moving forward. Consistent availability of polyiso makes it easier for developers and builders to predict costs and profit margins unlike OSB with common and drastic price fluctuations. With eight top-of-the-line polyiso manufacturing facilities located across North America, Atlas is continually able to meet customer needs and product demand.

The Cost Conundrum 

OSB became popular as a lower-cost sheathing solution; however, in March of 2013, as reported by lumber pricing company Random Lengths, OSB was at a high and cost $495 per thousand square feet.
As of April 2021, the price of OSB soared to $1,200 per thousand square feet³ with uncertainty as to when the pricing will stabilize. These prices greatly exceed those of a ½” equivalent of EnergyShield® polyiso continuous wall insulation, which is currently under $450 per thousand square feet.

Bracing for Change

It’s important to note that polyiso continuous insulation is not a structural material, and bracing requirements must still be met. There are several ways to properly brace walls without using sheets of OSB, making it possible for builders and contractors to find the application that best suits their needs and meets code requirements.

The International Residential Code (IRC 2018) has a section dedicated to wall bracing and is based on equivalent performance. This means that the structural performance of using alternative bracing methods with polyiso can be just as strong as using all OSB sheathing, as long as the minimum requirements are met. When using non-structural polyiso as sheathing, instead of OSB taking the weight it is distributed to corner bracing, metal strap bracing, and gypsum board (interior drywall) which already contributes to the structural strength of a wall assembly.  For more information on how to construct wall bracing to substitute OSB with polyiso continuous insulation, check out “IRC Wall Bracing: A Guide for Builders, Designers and Plan Reviewers.

Be sure to always check local building codes to ensure all requisites are properly addressed. This solution may not be applicable in seismic regions D and above, or those prone to high winds like coastal hurricane areas experiencing wind speeds of greater than 110 mph.

The Advanced Alternative

By replacing OSB with polyiso as a sheathing method and making straightforward adjustments to wall construction using proven bracing techniques, builders can save significant time and money.  When combined with the performance benefits of polyiso insulation, including higher R-values and WRB capabilities, the advantages are clear. While there may be a learning process with switching construction methods, it will quickly pay in dividends with every subsequent house built.

The law of supply and demand will always rule economics. Yet, builder profits and homeowner budgets shouldn’t suffer because of supply shortages when a proven, trusted, high-performance alternative is available.