Hi dgold. Yes we looked into expanding foam but from what Dana said about the house needing to breathe, we thought the blown-in cellulose would allow better air circulation and better mold and mildew prevention. Am hoping Dana will chime in here sometime with more of his expert advice. We are now perplexed and back to square one. The project's on hold for now and thank goodness the winter's over... Cheers, Rug.
Zzzz... ....zzz.... <snork> <koff> Huh? You called?
Houses don't need to "breathe" from an air movement point of view- in fact air movement is generally BAD. But from a vapor-permability point of view, liquid water that finds it's way into walls (either by water vapor permeating to a component cold enough to condense upon, or leak events) needs to be able to evaporate and escape. Air movement within the insulation can take warmer more humid air to cooler places to condense. This occurs at a much higher rate in fiberglass & rock wool than cellulose- literally a 10/1 difference, but with open-cell foam it's at least a 1,000/1 reduction in air movement, and with closed cell even more. But ALL of these materials pass water vapor, but again at different rates, closed-cell foam being the outlyer, being an order of magnitude less vapor-permeable than open cell foam. At stud-wall thicknesses closed cell foam is essentially vapor impermeable and waterproof- no water gets in, so it doensn't need to be able to dry. Open cell foam is still quite vapor permeable, but air-tight. Cellulose is neither.
Cellulose has the ability to wick water away from structural elements, and slowly dry without damage as long as it doesn't become saturated. It can handle being over 15% water by weight without damaging the cellulose, but by the time it's 30% water by weight it's soggy, and it'll sag. While it's hygric buffering capacity is high, it's in no way high enough to handle bulk loads of rainwater seepage behind clapboards while in direct contact, and no drain-plane material to reject the bulk of it. In that configuration it'll suck more rainwater in than it'll let leakage & condensation out.
Foam would also be a problem here- more for the siding than for the studs. Closed cell foam is water proof- the studs would only get wet on the exterior edge, but without even 0.01" of back ventiation the siding would trap water, and you may end up with the more rain-exposed sections rotting in less than a decade. With open-cell it could vapor-dry toward the interior after rain events, but it will end up slowly saturating the foam, with a similar end-result.
The only options that work here are granular insulations like poured perlite or blown EPS beads ("styrofoam",in bead form not boards.) These are porous enought for back-drying the siding yet stilll offer ~ R2.5/inch of depth. They don't block air movement much (far less than fiberglass or rock wool) but don't vapor-lock things either. It's still very important to air seal (even vapor-seal) the interior walls though, or you could end up with localized condensation issues inside the walls in winter if interior air has a steady leak through toward the cold edge of the stud. Blown EPS beads has even been shown to work the cavity of masonry cavity walls without creating vapor trapping & masonry-spalling issues. It's now common in the UK, but I've yet to hear of companies doing it in the US. The beads are blown with an adhesive to limit settling & sag over time. In a 4" deep full-dimension studwall (or cavity wythe) you get ~R10, which is WAY better than nothing. Even filling 2" masonry cavities gives you R5.
If you bite the bullet & re-side the place, the best bang/buck would usually be wet-sprayed cellulose, in the cavites, foam around the windows, with EPS or XPS foam sheathing (with no foil or poly facers in your climate zone- it has to be at least semi- vapor-permeable) over the structural sheathing (tape & caulk the seams of the structural sheating, then lap the seams of the foam to form an air-barrier, then tape or mastic-seal the seams on the foam.) It still needs a drain-plane (either housewrap or 15# felt, both of which are VERY vapor-permeable), then use furring (or ripped down 3/8-1/2" plywood) though-screwed to the studs to mount the siding to. With a back-ventilated rainscreen gap behind the siding very little rain moisure finds it's way into the wall, the siding dries as evenly as it ever did, and the house lasts forever.
If you use XPS for sheathing insulation you're limited to ~2" before it's impermeable enough to be an issue, but as long as it's more than ~35% of the total R value, impermeable is fine in your climate. 1" (R5) is more common. By putting insulating over the exterior, the studs stay warmer (=drier, less mold hazard), and the whole wall R-value goes way up, since the framing is a thermal short-circuit through the cavity insulation. (Wood is only ~R1/inch, compared to ~R2.5/inch for perlite, ~R3.7/inch for cellulose or open-cell foam or medium density fiberglass.)
Whether you insulate now or not, air-sealing from the interior can be a huge improvement. With a window fan you can alternately pressurize/depressurize the house running around with smoke pencil (or incense stick, if you can stand the stink) and a can of foam, caulk, tape, and labels to mark larger leaks. Most houses have huge air leakage at the foundation sill, and sealing/insulating the flundation sill & band joist with at least an inch of closed cell, or 2" of open cell foam is worthwhile. (The larger DIY foam kits are good for this, but in NY there are probably rebates for letting the pros do it, an it'll end up being cheaper in the end.) If you seal the foundation, and seal the attic, the "stack effect" drops significantly, lowering forces that drive air infiltration. Am empty-cavity studwall no-sheathing house like yours probably has 6-10 air changes/hour (ACH), and it would take a HUGE effort to seal it to the point where active ventilation was required (~0.35 ACH). But getting it under 2 is probably doable and cost effective, and will improve the heating & AC bills significantly, while improving overall comfort.
In general, when retrofitting a house the most cost-effective measures, in order of cost-effectiveness are:
1: air sealing
2: insulating
3: higher-efficiency HVAC.
Better windows tend to be way down the list, unless they're very leaky and can't be repaired. Storm window retrofits over single-pane windows that are in otherwise decent repair are usually cost-effective. They're less money, and more efficient than bottom-of-the-line insulated glass replacement windows with only 1/4" between the panes of the sealed glass. But if you're doing the whole residing with insulating sheathing, that's the time to bite the bullet on better windows too.
[edited to add...]
When painting the interior of the exterior walls (and the upper floor ceiling) applying vapor-retardent latex before going to the color coating is worthwhile. It's special stuff- most standard paints are fairly permeable, but vapor-retardent latex has permeability comparable to kraft facers used as vapor retarders on fiberglass batting. This will be more important after you insulate than before, and isn't nearly as important as air-sealing in terms of keeping interior moisture from condensing inside the walls during the winter. (A square inch of air leak holes is worth more than 50 square feet of vapor permeability through plaster or wallboard in terms of the volume of water transported.)