Our concern for water vapor is that it will condense somewhere and cause mold. The majority of these problems are caused by vapor which travels along with air movement (see air sealing). Here we examine the much slower process of vapor diffusion, that is, water vapor moving thru permeable materials, of which many common building materials are in that category.
The issue here is that common building materials range from very permeable to not especially permeable, and if moisture moves thru permeable into not so permeable, if that surface is cold enough, you get condensation and mold.
Because many common building materials are potentially vapor retarders, and because materials of low permeability restrict vapor from coming back out, we only consider adding a vapor retarder layer in the context of how the assembly is built and how it will interact with its climate. The actual strategies can be found in the moisture management section.
The remainder of this section is background on vapor movement and materials.
Water vapor (humidity) is water in the gas form. We usually think of air has "holding water", just as sugar dissolves into ice tea although this isn't technically correct.1 (Complete details on humidity here). Water vapor has different properties than liquid water mainly because it exists as small molecules; in particular, liquid water sticks to itself and hence clump into larger volumes. Molecules of water vapor are in a higher energy state, don't clump, and move around more.
Whenever there is a difference in vapor pressure (absolute humidity) between inside and out, the vapor will want to move from the area of higher vapor pressure to the one of lower vapor pressure. Details about humidity and vapor movement are under moisture control in the health section. For specifics on the condensing potential of an assembly see condensing potential in the health section.
Many materials, although they appear solid, actually are partially porous, and many common building materials are in this category: wood, drywall, most insulations, and most masonry materials for example. The most interesting cases are materials which have very small pores, a category that includes many housewraps, tar paper, and breathable fabrics like Gore-Tex. When the pore size is small, the material will allow water vapor to pass, but tends not to allow liquid water to pass. Liquid water is stopped because of its tendency to cling to itself--in this case the force holding the water to itself is generally greater than any force trying to push it thru the small pores. Its not that the liquid water can't pass thru, it's just that under normal circumstances, the force isn't enough to push it.
The molecular structure of the material also matters--whether is it hydrophilic (water loving) or hydrophobic (water repelling) Hydrophilic molecules has an electric charge, while hydrophobic ones do not---essentially water sticks to hydrophilic ones just like how it sticks to itself--by the equivalent of static electric--the same way dust sticks to your computer screen. Note that materials can also be only somewhat hydrophilic of hydrophobic, and molecules can be hydrophilic on one end and hydrophobic on the other. The actual physics is somewhat more complex, and beyond the scope of this site.
Porous materials will generally also get wet, that is water will linger in the pores. Such materials may have very low moisture content, but if they exist in air that contains water vapor, they will have some water in them. Dry wood, for example, typically has 7-10% moisture content. Materials that hold a lot of water are called moisture reservoirs. Obviously thinner materials will contain far less water than thicker ones, just because there is less space to hold water. How moisture reservoirs interact with the whole building is covered in the moisture control section.
All materials are divided into three categories: vapor-open, meaning water vapor passes thru fairly easily, vapor-retarder, meaning water vapor passes thru, but not easily, and vapor barrier, meaning no water vapor passes thru. In terms of perm ratings, anything with greater than 10 perms is vapor-open, between 1-10perms is a vapor retarder, and less than 1 perm is a vapor barrier. Many materials not only pass water vapor, but they can absorb it, sometimes a great deal of it. Wood, paper, drywall and most masonry materials are all in this category. These materials are called moisture reservoirs. This is important because moisture reservoirs act as buffers holding and releasing water on much longer time scales than changes in relative humidity or other sources of water.
Permeable materials: most masonry materials, most house wraps, tar paper, cellulose, fiberglass and mineral wool insulation, drywall, latex paint. Note that any building component that allows air to flow, like most bevel sidings will be effectively permeable due to that air flow.
Semi-permeable materials (class 3 retarder): wood, plywood, OSB, up to 1" of XPS, up to 3" of EPS, polyiso, polyurethane. Note that if the insulation is faced with foil or some other impermeable material, it becomes impermeable.
Semi-impermeable (class 2 retarder): vapor barrier paint, greater than 1" of XPS or 3" of EPS.
Impermeable (class 1 retarder): glass, metal, polyethylene sheets, most solid plastics.
Resources
Builders Guide Series, Joe Lstiburek, EEBA, 2000.
Notes
1: technically they're not the same thing from a physics perspective, but the net effect is similar. Sugar dissolves in water because water is a solvent for it, while water vapor in the air is due to it being in the gas form (see discussion on relatively humidity) The similarity comes because water is not fully in gas from until the boiling point (ie 212F /100C), hence the amount of water vapor at any given time is temperature dependent (as well as dependent on a source of moisture).
Hence what it looks like is that air (really a volume of space) "holds" water as if its dissolved.