An already serious shortage of insulation materials can be expected to get worse in the near future, according to a survey made in August by the National Association of Home Builders.

Of the nearly 300 hundreds responses received from builders, subcontractors and trade associations, only 10 per cent said they had as yet experienced no shortages. Serious to acute shortages were cited by 45 per cent and a similar percentage reported some shortages.

The NAHB Research Foundation estimates that over the next eight years 17 million existing housing units should be retrofitted with new or improved insulation in order to meet the administration's goals.Yet current production will be able to supply materials or only 36 million houses, it was estimated.

More than half of the builders said they had received notices from manufacturers of possible future curtailments of supplies. At present, manufacturers have an allocation system based on 1976 sales. Under this system the allotment for new homes has fallen from 85 per cent of the total production to 70 per cent. Retailers, those putting insulation into existing homes, now get the other 30 per cent.

As a result, one-third of the builders questioned responded that lack of insulation materials was actually holding up completion of dwellings under construction. There are no estimates as to how the ensuing dalays will affect house prices.

The tremendous current demand - double that of last year - has boosted the cost of solid blanket insulation by 20 per cent in the last six months, 10 per cent in just the last two months. The figures are a percentage point higher for blown insulation. An three out of five builders in the NAHB survey said they had received notices of additional future price increases.

The crisis brought builders and manufacturers together last week for meetings here at NAHB and at the Department of Housing and Urban Development. The insulation industry outlined plans for 25 per cent expansion in fiber glass production and a 400 per cent increase in cellulose (from insulation) output within the next two years.

HUD Secretary Patricia Harris said she would do her best to cut environmental red tape to facilitate construction of new factories.

The insulation industry estimated that by using combinations of old and new materials where necessary, the supply of insulating materials would catch up with demand by late 1979.