Insulating Basement Wall

Would insulating a basement foundation wall like this trap moisture?
I understand why walls are insulated, but I’m not sure if this is the best practice. Thoughts?
This is a townhome and the uninsulated wall is shared with the neighbor.


(I am assuming there is earth backfill on the other side.)

Not if you use XPS foam board insulation.
Do not use plastic film or batt insulation.
The foundation needs to dry from the inside.

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In my area (MN), there are tons of older homes with fiberglass insulation on the basement walls. That is no longer considered best practice though. Foam board is better, and spray foam is the best. This all assumes that the foundation walls are waterproofed from the outside, or that you don’t have issues with moisture intrusion. If you do, the walls shouldn’t be insulated or finished at all until that is addressed, in my opinion.

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Here is a good article on the subject:

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If done wrong.

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