We know lumber prices are up more than 170% since mid-April as of mid-September. As housing has rebounded, the lack of lumber has materialized as a key weak spot for housing supply. With that in mind, what’s the market share of alternative framing methods?
For better or worse, wood framing remains the dominant construction method for single-family homes in the U.S., according to NAHB analysis of Census Bureau data. For 2019 completions, 90% of new homes were wood-framed. Another 10% were concrete-framed homes, and less than half a percent were steel-framed.
On a count basis, there were 814,000 wood-framed homes completed in 2019. This was an 8% gain over the 2018 total. As noted above, steel-framed homes are relatively uncommon, with a total of just 3,000 housing completions in 2019, which was the same as the 2018 tally.
However, concrete-framed homes experienced accelerated growth. The total was up 46%, increasing from 59,000 completions in 2018 to 86,000 in 2019. The gains over the last 10 years are more striking. From 2009 to 2019, the concrete-framed total increased by 258% and the market share doubled from 5% to 10%.
Some of these gains came from a shift in geography. Concrete-framed homes are more common in the South. In fact, such homes made up 17% of all homes completed in the South. But the shift to home building in the South was not the only factor, as the share of all homes in the U.S. built in this region increased from 50% in 2009 to just 55% in 2019. The national gain for concrete-framed housing was also driven by share gains within the South itself, rising from 8% in 2009 to 17% mentioned above.
Hurricane-related building codes are thus part of the explanation, but the run-up in lumber prices in 2018 may have also moved the needle. And given the historic acceleration of lumber prices in 2020, more builders will be investigating alternative framing methods, including steel and concrete.