Vinyl siding under pressure but still tops fiber cement

Stucco stayed on top of the list of primary exterior building materials for single-family houses with 27 percent of new dwellings coated in the wall covering, while vinyl siding remained in second place with fiber cement gaining ground.

The latest figures about the characteristics of the nation's most recently built housing come from the U.S. Census Bureau, which shows 1.02 million dwellings constructed in 2022.

Vinyl siding was installed on 24 percent of new homes, just edging out fiber cement at 23 percent, to hold the second spot.

In terms of units, builders used stucco on 279,000 new houses, while vinyl siding was installed on 250,000 houses, fiber cement on 240,00 houses, brick on 189,000 houses, wood on 45,000 houses and "other" on 19,000 houses.

Vinyl siding manufacturers are determined to keep their lead over fiber cement for newly built homes, especially since buyers tend to select updated versions of their original siding when it comes to remodeling.

With remodeling factored into overall siding demand, vinyl siding continues to top the list of sought-after materials for building exteriors and will hold its place into the next decade, according to Freedonia Group.

Overall siding demand is forecast to grow about 1.4 percent annually and reach 110.4 million squares through 2030, Freedonia Group says, with vinyl products holding the top spot at 27.4 million squares compared with 24.9 million squares for fiber cement and 15.5 million squares for stucco.

To maintain appeal, siding extruders are touting new vinyl profiles, colors, and insulating and sound-proofing qualities to builders and remodelers. While they feel pressure from fiber cement, they also feel confident about their products, according to Steve Booz, vice president of marketing and product development at Westlake Royal Building Products.

Booz pointed to Westlake Royal's solid core CraneBoard-brand products, which is manufactured with Neopor-brand insulation to bridge over the framing of a house and provide more insulating power than fiber cement, wood, engineered wood and brick.

With $2.9 billion in annual sales, Houston-based Westlake Royal is the No. 3 pipe, profile and tubing extruder in North America, according to Plastics News' latest ranking.

"Fiber cement has done a nice job of pushing into the remodel market, but at the end of the day, the contractor likes our product better," Booz said in a phone interview. "Vinyl siding is easier to install for the contractor and the homeowner gets a low-maintenance product vs. a constant recaulk-and-repaint project. We keep our eye on fiber cement, but we think we have a winning position against it."

In 2005, when fiber cement siding joined the list of tracked building materials, it had 9 percent of new exterior residential wall share. Since then, fiber cement has gained 1-2 percent annually.

Census officials have been tracking use of vinyl siding since 1992, when it had 23 percent of primary exterior wall share on new homes and began a decade-long climb. The material peaked on new home exteriors in 2002 with a 40 percent share of the distribution.

Not long after, fiber cement began taking market share. But now, officials at Oakmont, Pa.-based Chelsea Building Products Inc. say composite PVC siding — its product is called Everlast — is displacing fiber cement.

With $169 million in annual sales, Chelsea ranks 36th among North American pipe, profile and tubing producers, the new ranking shows.

Made from a proprietary mix of inorganic materials and resins with an acrylic cap for color, Everlast products have been well received in the Northeast and Midwest and are doing well in the Southeast's coastal climates and sun, according to Gary Hartman, Chelsea's vice president of sales and marketing.

"We are taking share from fiber cement in the Midwest," Hartman said in an email. "Composite siding is a high-performance product that offers a lifetime of performance with very little maintenance. Owners don't have to worry about composites having the same issues that other products have, thanks to their water-resistance and sturdy composition."

Hartman said Chelsea officials see strong opportunity for composite siding in the repair and remodel market as well as for multifamily and mixed uses.

"Everlast advanced composite siding is high performance and long lasting, which means it is the preferred choice for a contractor or developer who is going to build and hold on to the property vs. someone who is renovating a property to flip it quickly and inexpensively," Hartman said.

Demand for siding in the U.S. is expected to grow at an average rate of 1.4 percent annually through 2025 to 103 million squares, according to Freedonia Group.

Vinyl siding demand will be supported by residential renovation activity, while fiber cement producers will see their share of the siding market increase due to its performance properties and ability to mimic the appearance of high-value materials while costing less.

However, the rate of market penetration will slow as vinyl and engineered wood manufacturers improve their products, providing renewed competition for fiber cement, Freedonia Group says.

Brick siding will remain popular in single-family homes in some parts of the country like the South, but demand gains will be below average due to competition from imitation brick products made from materials, such as fiber cement, Freedonia Group also says.

In terms of value, siding demand is forecast to rise at an average rate of 3.3 percent per year to $11.4 billion in 2025. The growth will come almost equally from increases in product volume and average prices amid a shift toward higher-value products, Freedonia Group says.

Even if builders switch to smaller home designs to make them more affordable, polymeric siding producers probably won't take a sales hit.

"We've seen some national builders go more to their economy line of homes, which incorporate more vinyl siding and less other sidings," Booz said. "So, even if they go to smaller homes to attack the affordability problem, that bodes well for vinyl siding because we remain the most cost-effective product to put on a home."

Design trends related to the modern farmhouse also are driving sales. With neutral color exteriors, usually white, and black or colored window profiles popping out against a variety of siding profiles and widths, especially board and batten for vertical lines, the modern house combines rustic vibes with contemporary features.

"Initially, we envisioned board and batten would serve primarily as an accent or ancillary product. We were wrong, but pleasantly surprised," Hartman said. "The modern farmhouse style took off, and for us, it caused a boom in demand for Everlast Board & Batten being used as a primary siding product for homes."

Product acceptance plays a role, too.

The list of states enacting laws to allow the use of vinyl siding products grew this month with Indiana joining North Carolina, Tennessee, Oklahoma, Arkansas and Texas.

Indiana Gov. Eric Holcomb signed a law that went into effect July 1 to spur construction of affordable housing by establishing a state loan program to help pay for the infrastructure needed to build it.

Communities will be able to apply for loans for water distribution systems, sanitary sewer systems, electric and gas distribution lines, traffic signals, sidewalks and curbs — costly steps on the road to building more housing developments.

The new law establishes a revolving loan fund as part of an infrastructure assistance program aimed at clearing the path for local governments and developers to work together to boost affordable housing options in Indiana.

Infrastructure loan applicants will be evaluated on criteria that gives weight to local ordinances allowing higher-density housing, accessory units, and manufactured or modular housing, and discourages requirements for garage sizes or placement, off-street parking and minimum lot sizes.

"We are creating a tool for our communities to provide infrastructure for the housing needs they see fit in their communities, especially workforce housing," Indiana State Rep. Doug Miller, an Elkhart Republican, homebuilder and co-author of the legislation, told the Indiana Capital Chronicle.

The measure is being applauded by the Vinyl Siding Institute (VSI), an Alexandria, Va.-based trade group for manufacturers of vinyl and other polymeric sidings.

Local leaders of some communities near Indianapolis, such as Carmel, had talked about banning vinyl siding out of concern it could lower property values.

However, like elsewhere in the U.S., Indiana needs affordable housing for working-class residents, and vinyl siding is a key factor in the affordability of new housing.

Restrictions and prohibitions on the use of vinyl siding increase housing prices and contribute to the affordability crisis, according to VSI Vice President Matt Dobson.

The trade group's website has a three-page analysis of different cladding options. The April 2023 chart shows the incremental cost increases of using materials other than standard vinyl siding on a 2,274-square-foot house. Premium vinyl siding costs about $1,000 more, painted fiber cement about $6,000 more, polypropylene siding about $8,000 more, stucco about $11,000 more, brick about $26,000 more, and cedar wood siding about $27,000.

For every $1,000 increase in the median home price, 117,932 households are priced out, according to the National Association of Home Builders, a Washington-based trade association representing homebuilders, remodelers, subcontractors, building product manufacturers and others.

"People buy homes based on what they can afford. If you add $1,000 to the cost, it knocks out more than 100,000 people from the market," Dobson said. "More people need to look at this through the economic scope."

In Indiana, a task force that found the biggest gap in the state's housing stock is entry-level homes between $150,000-$250,000 for households earning $55,000 or less. However, houses rarely go up for sale in that price range due to the high cost of land, construction and regulatory costs.

Giving financial incentives to communities that don't have any costly or restrictive housing mandates in place is a unique way to begin addressing the issue, according to Dobson.

"They are trying to encourage local governments to get out of the way of housing and let the market do what it does to create more affordability," Dobson said. "It was a very creative approach and I hope it's effective to get the heart of the issue."

Booz is pleased.

"With the big win in Indiana, we'll be able to push into the Midwest even stronger," he said.

VSI and its supporters have been tackling issues at the state level about a decade. They first made inroads in North Carolina, where state lawmakers limited local governments' control of architectural requirements and materials in 2015. Other states slowly followed, including Texas, where municipalities can't prohibit products approved by the national building code.

No action has been taken yet in Georgia, however, where VSI, in partnership with the Georgia Chamber of Commerce and Habitat for Humanity, have been pushing back against local governments setting home design standards that dictate siding materials, location of windows and exterior paint color.

Vinyl siding has been banned in about 70 percent of metro Atlanta jurisdictions and counties, according to VSI, which blames misinformation and a desire to keep home prices high.

In March, State Rep. Dale Washburn, a Republican from Macon, presented two companion bills that would require local governments to issue building permits for single-family homes that measure 1,200 to 2,500 square feet and meet the state building code minimum.

"This is about workforce housing," Washburn told Georgia Public Radio. "But it is also about the little first-time homebuyer who would like to buy a home and often they can't afford to buy one where they'd like to buy because a local city council is telling them if you build a house in our city, we want you to build it according to our taste."

The Georgia bill got some traction and VSI members hope Washburn can move it through a conference committee this year, Dobson said.

"We still plan to focus there," he added. "We're getting more momentum with people and groups behind us. We couldn't take it over the finish line this year, but we will continue to push it for this year and likely into next year."

VSI also is following Minnesota legislation. Dobson said there's a provision in an omnibus bill that would stop local governments from adopting aesthetics mandates.

"It's part of an affordable housing package that includes tax credits, refunds and down payment assistance," Dobson said. "Since its part of a bigger bill, we feel pretty confident about that one, but it didn't pass through in 2023, not because of the aesthetic mandate elements, but because of the complexity of the tax credits and down payments."

VSI also is watching Virginia and Iowa, where state lawmakers are trying to reduce the regulatory requirements for builders.

"We're trying to take advantage of the political climate in Virginia," Dobson said. "Virginia also has some issue with what they call proffers. If you build the house this way, you get certain incentives. It's basically another way of restricting our products."

Regionally, vinyl siding was most popular in the Northeast, where builders put the material on 73 percent of 60,000 new houses, followed by wood at 12 percent, fiber cement at 8 percent, brick 5 percent and stucco at 1 percent with "other."

Still, vinyl lost wall share in the Northeast, where it had been used on 76 percent of new homes built in 2021, to wood and brick.

A similar scenario played out in the Midwest, where 137,000 new homes were constructed, and more than half have primarily vinyl exteriors. Vinyl siding was installed on 57 percent of new homes in the region, but that's down from 60 percent of wall share in 2021.

However, instead of losing to wood and brick, in the Midwest, fiber cement picked up some of vinyl siding's wall share — going from the primary material on 12 percent of houses in 2021 to 19 percent in 2022.

In the south, where 593,00 new single-family homes were built in 2022, brick continues to dominate the exteriors. The material was installed on 30 percent of new homes compared to 25 percent stucco, 22 percent fiber cement and 20 percent vinyl siding.

In the west, of 233,000 new homes built, 56 percent were stucco and 34 percent were fiber cement. Vinyl siding tied with wood at 4 percent each for wall share in the west.

After more than a decade of continuous growth, annual spending on improvements and repairs to owner-occupied homes is expected to decline by early next year, according to the latest Leading Indicator of Remodeling Activity (LIRA), which was released in April by the Joint Center for Housing Studies of Harvard University.

Homeowner improvement and maintenance spending is expected to top out at $458 billion in the coming year, compared with market spending of $471 billion over the past four quarters, according to Abbe Will, associate project director of the Remodeling Futures Program.

"However, strong and steady growth in the number of homes permitted for remodeling projects, as well as a slew of federal incentives for energy-efficient retrofits, may yet buoy remodeling expenditure from steeper declines," Will said in a news release.

LIRA projects that year-over-year expenditures for homeowner improvements and maintenance will post a modest decline of 2.8 percent through the first quarter of 2024.

"Higher interest rates and sharp downturns in homebuilding and existing home sales are driving our projections for sluggish remodeling activity next year," Carlos Martín, project director of the Remodeling Futures Program at the center, said in the release. "With ongoing uncertainty in financial markets and the threat of a recession, homeowners are increasingly likely to pare back or delay projects beyond necessary replacements and repairs."

But siding manufacturers aren't feeling it yet.

"There's still pent-up demand. I'm feeling pretty bullish on the remodeling market for us going forward," Booz said.

Remodeling offers numerous benefits to homeowners who want to change their living environment without uprooting their family and moving.

"Home improvements can add more space for a growing family or older parent, improve energy efficiency and increase the resale value of your home," Booz said.

While new vinyl siding sales are strong for Westlake Royal in the Northeast down to the mid-Atlantic and through the Midwest out toward the Plains States, there are also "good hotbeds of remodeling activity" in those regions given the age of homes, Booz said.

"Some economists talk about homeowners staying put because of interest rates. People locked into a 3 or 4 percent interest rate aren't giving it up for a 6 or 7 percent just to move. We think it's a nice tailwind for the remodel business," Booz said. "People will once again stay in their homes and fix them up vs. making that move — at least until the interest rates change."

From a market segment perspective, Hartman said composite siding products are doing very well in remodeling because remodelers tend to be first adopters more so than new construction professionals.

"Remodelers are looking to differentiate using new and advanced products so they can earn repeat business down the road, whereas new construction builders are selling the entire house without a specific focus on one product," Hartman said. "Remodelers are selling directly to the homeowner; therefore, our product holds a better position for what they are trying to offer their customers. So, we're finding them being first adopters of our products, which makes remodeling a bright spot for us."

Vinyl siding typically carries a lifetime warranty to the original owner and a prorated warranty of at least 50 years to subsequent owners. For some, it's time to replace first-generation products.

VSI's Vinyl Siding Coalition established a pilot program in Northeast Ohio that has taken back 125,000 pounds of post-consumer residential vinyl siding for recycling, usually into siding or decking.

The group was one of six to share a $460,000 Viability grant from the Washington-based Vinyl Institute. The siding coalition will use its funding from U.S. PVC resin manufacturers to create the operating infrastructure needed to grow the program by developing a governance structure, establishing a brand, and creating an operational tracking system.

The goal is take steps to expand into two new markets in 2024 and recycle 5 million pounds of post-consumer rigid vinyl annually by 2026.

The coalition will use its funding to ramp up a program called Revinylize later this year.

"We're setting up a sophisticated website platform to focus on all rigid vinyl, not just vinyl siding but any type of rigid vinyl like pipe, deck, rail and windows. All those products can be recycled together," Dobson said. "The hardest lift part is setting up a system so people can sign up and join the movement."

The coalition will look for partners in Michigan, the Northeast, North Carolina, Virginia and Tennessee.

"That's where vinyl siding has played a significant role in housing for the last 50 or 60 years. That first generation of vinyl siding may be coming to end of useful life. There's going to be a concentration of product that can be recycled and that's what we're going after."

Plastics recyclers involved in the program will report to a third-party group called Green Circle Verified, which will verify that the system put in place reaches post-consumer recycling facilities run by operators who participate in semiannual reporting of how much they are collecting.

Vinyl material can be recycled as often as eight times without losing its durability and resilience.

"Vinyl siding is the most sustainable product you can use on your house," Booz said. "People don't believe it, and a lot of people don't want to hear it. But if you look at a cradle-to-grave analysis of what it takes to make the product and maintain it over the years, it's not only the most cost-effective product you can use [but also] it's the most sustainable product you can use. It's remarkably eco-friendly, which isn't often associated with plastics."