Yes, those gaps should be sealed.

Good golly, I'm guessing that you are at least looking at the backside housewrap? This helps illustrate why the industry is moving away from housewraps and towards liquid applied barriers and tapable sheathings like Huber Zip system. It's not just an energy concern. Humid air flowing through that crack will deposit all sorts of debris in the fiberglass and could result in mold and mildew. You should insist on a blower door test that meets or exceeds international code minimums.

The gap will technically get covered by whatever that black siding stuff on the outside is before they put the stucco on. But yes I think it should still be filled from the inside (before the insulation which is a little late). Thanks though, I'll bring it up to my builder and say WTH.

The bigger problem is that gap should not be there at all. That gap is a joint of two pieces . That joint should be over a wall stud. The fact the gap is there says incorrect sheathing at a minimum.

Here is a wider view looking back at the front door (before insulation went in). This is that gap I'm referring too, right behind the switch box. It looks a 2x6 that wasn't aligned close enough, thus leaving the gap.

The remedy is to remove that insulation, seal it, then put the insulation back, correct?

It might be easier to find such cracks from interior but it's better to seal sheathing and floor bands from the exterior as you can access more of the crack. Agree that they need to add studs at joints. In one county we work in, they require blocking at horizontal joints too. Don't like the decrease in R-value but people should be using exterior insulative sheathing in almost all climates anyways.

Don't rely on housewrap or stucco paper for air-sealing.

This is just horrible and embarrassing. Exterior foam?

I'm a newbie David. Foam sealing should be done on the inside in joint gaps prior to insulation, correct?

This is not just a building envelope problem, it is also structural. Add studs at all vertical joints of structural sheathing. I'm surprised it got past pre-insulation structural inspections.

Filling all exterior framing cavities with spray foam is an easy way to correct for sloppy, leaky framing like what's in your picture. There is probably cracks in the hundreds of feet that you can't see. It all adds up to a sizable hole in your home. Batts can perform well, but not with the level of quality you see in typical construction. The picture shown is even less than typical.

Many cracks can not be sealed with cavity spray foam insulation which is why it's recommended to employ air barriers like the airtight drywall approach. Most of the high performance industry is sealing at the exterior with liquid applied housewrap or taping all joints in sheathing, bands and other transitions. You can tape ordinary plywood or osb but it usually takes a good primer like Tescon and tape like 3M 8067.

Canned spray foam is not the right way to seal that crack. I would sister a stud, nail the sheathing to it and tape joints from exterior.

Exterior foam is for insulation outside the framing and sometimes sheathing. It provides an additional barrier for infiltration but importantly gives a thermal brake for the framing.

Around here, higher performance homes use Zip most of the time. This is taped at the sheathing level so provides a good air barrier. We did zip foam so that we have foam over all the framing. Totally different than spray foam. Cheaper and better.

Anywhere in Colorado should probably have exterior foam. I am in NC where average January lows are 30.

Additional photos showing the gaps between the OSB. (They then put in the insulation without sealing them up via foam). Outside will have that black cover with wire over the OSB to then be stucco'd. If insulation is pulled back and they are sealed with the foam from the inside, will that suffice? Thoughts?

Exterior insulative sheathing does more than save energy. It keeps framing and structural components warmer, which usually means drier. Cold framing exposed to humid air encourages unhealthy things hidden away behind the finishes. The international building codes encourage exterior insulative sheathing and require it for building climate zones 6 and up which includes much of CO.

We have used ZIP + R (pre-insulated ZIP) on several homes and highly recommend it. It shifted us from SIP walls for most of our builds. Structural sheathing, insulative sheathing, and weather barrier all in one product. If OP's build had included even the regular zip, it would probably do better on it's blower door test which apparently this build will not benefit from though it's not too late..

Hu - One thing to keep in mind is humidity issues. We are much more humid and that would never be tolerated. But you are drier so perhaps things are different.

The sheathing should be an air barrier - super important in a humid environment. Perhaps you are getting air tight drywall and in your dry climate that is okay. Personally - it looks subpar to me.

Whaas - there are other ways to have a reasonable house. But the fact is everyone is moving to external foam for a number of reasons.