Current capabilities of accurately predicting the behavior of the various subassemblies of light‐frame wood structures (walls, floors, and roofs) now meet (or exceed) the ability to characterize material properties. However, subassembly analysis techniques are not commonly incorporated in design practice. The deficiency lies in the inability to efficiently predict the interaction of the subassemblies which yields the behavior of the entire structure. The purpose of this study is to develop and validate a simple structural analysis model to predict the behavior of light‐frame buildings under lateral load. The model is limited to the racking response of shear walls that are arranged in a rectangular fashion beneath a rigid ceiling/floor diaphragm. Nonlinear load‐slip behavior of fasteners is utilized in an energy formulation to yield a three‐degree‐of‐freedom representation of each story of the building. Predicted behavior from the analysis model agrees favorably with results from full‐scale tests. The model provides a method for estimating the behavior of light‐frame buildings near lateral loading and should lead to realistic shear wall strength and stiffness requirements for both residential and commercial buildings.