A federal district court in East Texas has vacated a rule from the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture that would have required the 2021 International Energy Conservation Code for certain federally backed housing programs.

Because HUD and USDA housing programs support residential construction nationwide, the decision could affect energy code requirements for thousands of federally financed homes across the country.

The rule would have tied certain federally backed mortgage programs to newer model energy codes, including the 2021 International Energy Conservation Code and the ASHRAE 90.1-2019 standard.

The lawsuit challenging the rule was filed by the National Association of Home Builders and a coalition of states. NAHB argued the mandate would increase construction costs and exceed the authority HUD and USDA have under the Cranston-Gonzalez National Affordable Housing Act.

In a statement following the decision, NAHB Chairman Bill Owens called the ruling “a major victory for housing affordability.”

Industry groups remain divided over how stricter energy codes affect housing costs and building performance.

For roofing contractors, energy code updates can directly affect roof assemblies, attic insulation levels and ventilation practices.

Curt Rich, president and CEO of the North American Insulation Manufacturers Association, and Michael Kwart, executive director of the Insulation Contractors Association of America, said newer energy codes often increase insulation requirements throughout the building envelope.

“Homebuilders are not wrong that the most recent model energy codes can be expensive to implement,” Rich and Kwart wrote in commentary on the case, noting estimates that complying with the 2021 IECC could add between about $9,600 and $21,400 to the cost of a new home, depending on climate zone.

They suggested the 2012 IECC could provide a compromise that improves efficiency while limiting construction cost increases.

“It is time to call a ceasefire in the energy code wars,” they wrote.

Some building-performance professionals say stronger codes remain important for long-term building quality and indoor air conditions.

Jessica A. Azarelo, CEO of The Attic Queen, said she was disappointed by the ruling.

“Homes need to be built better,” Azarelo said. “It’s far cheaper to do it correctly during new construction than to fix the problems after the house is built.”

She said issues such as poor air sealing, improper insulation installation and poorly sized mechanical systems can lead to indoor air quality problems and moisture issues in new homes.

Industry analysts say the ruling highlights a broader national debate between housing affordability and long-term building performance.

Lilli Tillman Smith, an analyst covering roofing and insulation at Principia, said adopting the 2021 IECC would increase upfront construction costs but would also produce homes that are more energy efficient and less expensive to operate over time.

She said slower adoption of stricter codes could also reduce demand growth for insulation materials because code updates typically increase insulation levels in attics and other parts of the building envelope.

Even without a federal mandate, Smith said newer energy codes are expected to continue advancing through state and local adoption.

For now, the court’s decision leaves federal housing programs tied to older energy standards while the broader national debate over energy codes and housing affordability continues across the construction industry.