Fairlawn, Ohio — The U.S. needs more housing units, and that unfilled demand is creating a growth opportunity in the PVC market.
Housing in the U.S. is underbuilt by between 6 million and 7 million units, according to Ed Hudson, market research director with Home Innovation Research Labs in Upper Marlboro, Md. Hudson spoke Oct. 11 at SPE Vinyltec 2023, an industry conference in Fairlawn.
"Housing demand exceeds supply," Hudson said. "We're facing an affordability crisis and skilled labor shortages."
The housing market "stumbled a bit" in the last year because of higher interest rates, but Hudson added that higher rates don't seem to have affected demand for home remodeling.
Home Innovation Research Labs is owned by the National Association of Home Builders trade group. Hudson said that the firm's goals are to develop and commercialize new building technologies.
One recent plastics-related growth area has been luxury vinyl flooring, according to Hudson.
"Luxury PVC flooring has been one of the most popular materials in several years," he said. "Millennials and younger homeowners are more comfortable with non-traditional homes and materials."
But getting those new units built remains a challenge. "COVID made housing a core of people's lives," Hudson said. "But there aren't enough builders and contractors to build housing we need. We lost a lot of workers during COVID.
"Residential construction will boom again, but interest rates are holding us back," he added.
A housing comeback would create a windfall for PVC, since construction accounts for more than 60 percent of U.S. and Canadian PVC demand, according to industry data. Hudson said that, according to recent construction data, PVC accounts for almost one-third of new flooring, a little more than 40 percent of new windows and almost 40 percent of new siding.
"Vinyl has an advantage because it's easy to install and it's re-finished, but it needs to look and feel more realistic if it wants to grow," Hudson said.