BILLINGS — President Donald Trump is reaffirming his intention to impose reciprocal tariffs, expressing optimism about their planned implementation on April 2. He has dubbed the date a "liberating day," despite concerns that the tariffs may negatively impact the economy, including home builds.
The tariffs, which will target imports from Canada and other countries, are projected to increase costs for the construction industry significantly. In particular, new tariffs on wood products, including those necessary for building homes, could raise the price of constructing homes in the United States by approximately $10,000, according to National Association of Home Builders.
Watch the story here:
Lewis Earnst, owner of Montana Home Builders, is anticipating these changes and acknowledges that the tariff hikes will likely affect consumers.
“We need a lot of lumber. So, the price increase, the tariffs, they will have an effect, and they will increase cost to the end consumer,” Earnst said.
With the United States being the largest importer of wood products in 2023, the impact of these tariffs on prices could be significant. Bankrate, a financial services company based in New York, estimates that the increase in lumber prices might push home-building costs up about 5%.
Earnst remains committed to minimizing the burden on customers.
"So, if material costs go up, one thing we try to do is take a step back and figure out, how can we make our processes of building a home more efficient to save on labor costs?" Earnst said.
Earnst, who is originally from Billings but moved to South Carolina while serving in the military, just started his business in Billings in January.
"Real estate is just a passion of mine. Whether it's selling, buying, renting, everything like that. And construction and working with my hands is just what I'm good with," Earnst said.
He has always had a goal of keeping home prices low, so the new challenge of higher supply costs does not worry him too much.
"I've seen all the news articles and everything about the skyrocketing price of homes. And so my main goal with my business is just to find ways to keep building homes, but at a lower cost. Try to help slow down the rising cost of the home market here," Earnst said. "My goal is to keep the cost of homes as low as possible. So, seeing the tariffs potentially raising that cost, it's unfortunate, but like I said, we're just gonna do our best to make our processes more efficient so that that effect isn't as substantial."
Kyle Bergum, owner of Grand Lumber, said his company sources most of its wood products from Idaho, but they do get some supplies from Canada.
"Right now for us, it's business as usual. We don't see anything major happening to us. It kind of seems like a negotiation tactic," Bergum said.
Bergum said his supplier in Canada told him the prices would not change drastically.
"The stuff I get from Canada hasn't changed in months. So I don't foresee it happening...For instance, OSB (oriented strand board), which is what we get out of Canada. The highest we were selling out of that COVID time was $69 a sheet. And right now we're in the $15, $16, $17 sheet. And that's about normal," Bergum said. "We do get lumber mainly out of Idaho. Those prices have kind of been going up right now, but that's the normal ebb and flow of materials. That's something that happens all the time. It could change weekly."
