Construction Material Costs: How Home Depot’s Tariff Strategy Affects Specialty Contractors

Home Depot’s recent announcement regarding its approach to tariffs has significant implications for residential specialty contractors.

Published on Jul 10, 2025

Home Depot’s recent announcement regarding its approach to tariffs has significant implications for residential specialty contractors. While the retail giant plans to maintain stable pricing for most products despite new tariffs, they’re also making strategic decisions about which product lines to continue carrying. For contractors in foundation repair, roofing, fencing, hardwood installation, and similar trades, these changes will reshape material sourcing strategies throughout 2025 and beyond.

According to Home Depot’s merchandising chief Billy Bastek, the company won’t broadly pass on the added costs from new tariffs to customers. Instead, they’re taking a more nuanced approach: maintaining prices on most items while potentially discontinuing products that become unprofitable under the new tariff structure. This strategy creates both opportunities and challenges for specialty contractors who rely on Home Depot for materials and supplies.

Construction Material Costs: What Specialty Contractors Need to Know

Construction Material Costs remain a top concern for residential contractors as Home Depot implements its tariff strategy. The current tariff landscape includes a reduction of Chinese import tariffs from 145% to 30% under a temporary deal, plus a new 10% tariff on all global imports. These changes are forcing major suppliers like Home Depot to make difficult decisions about their product offerings.

For specialty contractors, understanding these shifts is crucial for project planning and client communication. While Home Depot’s size and market power allow it to absorb some costs, smaller suppliers may not have the same flexibility. This could create ripple effects throughout the supply chain that impact material availability and pricing for specific trades.


Building Materials Prices Remain Stable Despite New Tariffs

Building Materials Prices at Home Depot will remain stable for most products despite the new tariffs. This approach contrasts with other retailers like Walmart, which has signaled potential price increases. For specialty contractors, this price stability provides a competitive advantage when bidding on projects, as material costs can be estimated with greater confidence.

However, the stability comes with a caveat: Home Depot’s executives have made it clear they’re willing to remove items from their offerings if those products become too costly to import under the new tariff regime. This selective pruning of product lines could create challenges for contractors who rely on specific materials.

The research data shows varied price trends across different material categories:

Material Category

Price Change (2024-2025)

Market Trend

Precast Concrete

+6.8%

Increasing

Fabricated Steel

-10.0%

Decreasing

Softwood Lumber

+8.6%

Increasing

Aluminum Products

+17.9%

Sharp Increase

Metal Products

+5.5%

Moderate Increase

Roofing Materials

+1.2%

Slight Increase

These trends suggest that while Home Depot may maintain stable pricing overall, the impact will vary significantly by trade and material type. Contractors working with aluminum products, for instance, face more significant challenges than those primarily using fabricated steel.

Will Material Cost Increase Affect Your Contracting Business?

Home Depot’s approach may prevent a Material Cost Increase for many products contractors rely on daily. However, the impact will vary significantly depending on your specialty:

Roofing Contractors

Roofing materials have seen only a slight price increase of 1.2% over the past year, suggesting relatively stable conditions for this sector. However, the average asphalt roof replacement cost has risen to $30,680, representing a 15% increase from 2022. This discrepancy suggests that labor costs and other factors beyond material prices are driving overall project costs.

Metal roofing demand has surged by 35% from 2024 to 2025, potentially making these products more vulnerable to availability issues if Home Depot decides to discontinue certain lines. Roofing contractors should maintain relationships with specialty suppliers as a backup.

Foundation Repair Specialists

For foundation repair contractors, the news is mixed. Precast concrete products have seen a price increase of 6.8%, while brick deliveries have increased by 8.5% since January 2024. However, concrete block availability has improved by 4.2%, potentially offsetting some of these challenges.

The overall material price index for foundation-related materials has decreased by 0.9% year-over-year, suggesting that Home Depot’s strategy may benefit this sector. Foundation specialists should monitor inventory levels of critical materials and consider bulk purchasing when advantageous.

Hardwood Flooring Installers

Hardwood flooring contractors face particular challenges as lumber prices continue to fluctuate. Softwood lumber has increased by 8.6%, potentially affecting subfloor materials. While Home Depot hasn’t specifically mentioned hardwood flooring in their tariff response, the company’s willingness to discontinue products could impact specialty hardwood options.


Supplier Diversification: Lessons from Home Depot’s Strategy

Supplier Diversification is becoming essential for contractors who want to maintain stable pricing. Home Depot’s own approach offers valuable lessons for specialty contractors. The company has taken significant steps to diversify its sourcing in response to tariffs imposed since Trump’s first term. By mid-2026, no more than 10% of its products will be purchased from any single foreign country.

This strategic pivot represents a fundamental shift in how major retailers manage their supply chains. For residential contractors, a similar approach can provide insulation against material shortages and price volatility:

  1. Establish relationships with multiple suppliers - Don’t rely exclusively on Home Depot or any single source for critical materials

  2. Consider independent building supply partners - These often offer competitive advantages through:
    • Direct manufacturer partnerships

    • Matched or better pricing compared to big box retailers

    • Specialized product knowledge

    • Custom ordering capabilities

  3. Leverage Home Depot’s expanded network - The company’s recent $4.3 billion acquisition of GMS represents a significant shift in the contractor supply landscape, adding 320+ distribution centers and enhancing delivery capabilities with an 8,000+ truck fleet


Planning for Extra Building Materials in an Uncertain Market

Contractors should consider ordering Extra Building Materials for frequently used items that might be discontinued. With Home Depot potentially removing certain products from their lineup, maintaining a strategic inventory of commonly used materials can prevent project delays and customer disappointment.

This approach requires careful inventory management:

  • Monitor price trends for key materials

  • Plan purchases around known price increases

  • Take advantage of bulk purchasing opportunities

  • Create storage systems for additional inventory

  • Track usage patterns to avoid overstocking

For specialty contractors, the balance between having sufficient materials and tying up too much capital in inventory is delicate. Consider creating a tiered inventory system where the most frequently used items are stocked in greater quantities, while specialty items are ordered on a project-by-project basis.

How the Tariff Changes Will Affect Different Trades

The new Tariff policy has prompted Home Depot to reconsider which products it will continue to stock. This selective approach to product offerings will impact different specialty trades in various ways:

Drywall Contractors

Home Depot’s acquisition of GMS, a leading distributor of wallboard and ceiling systems, suggests a commitment to the drywall sector. This acquisition brings several contractor-focused improvements:

  • Combined network of 1,200+ locations

  • Improved delivery capabilities

  • Broader product access

  • Enhanced trade credit terms

  • Streamlined credit processing

For drywall contractors, these changes likely mean improved material availability and potentially more competitive pricing. However, specialty finishing products imported from overseas may be vulnerable to discontinuation.

Fencing Contractors

Aluminum fencing products have seen some of the sharpest price increases at 17.9%, making them potential candidates for Home Depot’s product line review. Contractors specializing in aluminum fencing should be particularly vigilant about potential changes.

Wood fencing materials, tied to lumber prices, have seen moderate increases. Home Depot’s domestic sourcing emphasis may help stabilize these products, as approximately 50% of their products are sourced domestically.

Lawn Care and Landscaping Professionals

Outdoor living investments continue to rise, with 58% of homeowners planning outdoor improvements in 2025. This trend suggests Home Depot will likely maintain strong inventory in landscaping and outdoor living categories despite tariff pressures.

However, specialty imported items like certain outdoor furniture, decorative elements, and specialty tools may be vulnerable to discontinuation if tariff costs make them unprofitable.

Strategic Recommendations for Specialty Contractors

The Impact of Tariffs on Construction Material Costs 2025 will vary significantly by trade and material type. To navigate these changes successfully, consider implementing these strategies:

1. Enhance Your Supply Chain Resilience

  • Develop relationships with multiple suppliers - Create backup sourcing options for critical materials

  • Consider joining buying groups - Aggregate purchasing power with other contractors to negotiate better terms

  • Explore manufacturer-direct programs - Many manufacturers offer contractor programs with preferential pricing

2. Adjust Your Estimating and Bidding Practices

  • Build material contingencies into bids - Include allowances for potential price fluctuations

  • Shorten quote validity periods - Consider reducing how long your quotes remain valid to protect against sudden price changes

  • Communicate material risks to clients - Set expectations about potential material substitutions if products become unavailable

3. Optimize Inventory Management

  • Identify critical materials - Determine which products are essential to your operations and potentially vulnerable to discontinuation

  • Create strategic reserves - Maintain additional inventory of frequently used items that might be affected

  • Implement inventory tracking systems - Use digital tools to monitor usage patterns and optimize ordering

4. Leverage Home Depot’s Enhanced Services

Despite the challenges, Home Depot’s recent changes also create opportunities:

  • Utilize enhanced delivery options - Take advantage of the expanded distribution network

  • Explore trade credit programs - Improved financial services can help manage cash flow

  • Investigate pro-specific services - Many locations offer dedicated contractor services that can improve efficiency

Looking Ahead: Preparing for Future Market Changes

As Home Depot and other major suppliers continue to adapt to the evolving tariff landscape, specialty contractors must remain vigilant and adaptable. The construction material market shows signs of stabilization with mixed trends:

Positive Indicators:

  • Improved material availability in some categories

  • Price stabilization in select materials

  • Enhanced distribution networks

Ongoing Challenges:

  • Continued tariff pressures

  • Variable pricing by material category

  • Supply chain adjustments

For residential specialty contractors, success in this environment requires a proactive approach to material sourcing, inventory management, and client communication. By understanding Home Depot’s strategy and implementing your own adaptations, you can turn these market challenges into competitive advantages.

The contractors who will thrive are those who recognize that material sourcing is no longer just a procurement function—it’s a strategic business activity that directly impacts profitability, project timelines, and customer satisfaction.