Montana’s construction industry is sounding the alarm on rising building costs, warning that increased labor expenses, elevated permit fees, and persistent material prices are worsening the state’s long-standing housing affordability challenge.
Homebuilders across Montana say they are being forced to pass growing construction costs on to buyers and renters, a trend that continues to squeeze families already struggling to secure reasonably priced homes.
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Andy Shirtliff, executive director of the Helena-based Montana Building Industry Association, said the financial pressures facing builders are multifaceted. The cost of land, construction materials and the difficulty of finding enough qualified workers have all combined to push prices upward. “Montana is still one of the most unaffordable places to buy a home,” he said. “Rent has gone up, housing costs have gone up. And it’s not from one thing, it’s from multiple things. It’s the cost of land, the time it takes to develop that property, and everything from permitting, licensing, platting, all that stuff that goes into it.”
Shirtliff noted that several Montana cities have significantly raised their fees for construction permits. At the same time, builders are absorbing higher prices for key materials and equipment.
“And along with that, the price of lumber, the price of materials and tools have gone up,” he said. “And it’s difficult to also find workforce, is another thing. That makes it a little difficult to build a home. It takes longer, and that drives up costs.”
These concerns follow the National Association of Home Builders’ warning that tariffs enacted by the Trump administration on Canadian imports — including lumber and cabinetry — would push housing prices even higher. NAHB chairman Buddy Hughes said in a statement, “These new tariffs will create additional headwinds for an already challenged housing market by further raising construction and renovation costs.”
The tariffs, which took effect Oct. 14, are intended to bolster the U.S. lumber industry by making foreign imports more expensive. But with Canada supplying nearly 85% of all imported U.S. lumber — and Montana alone importing roughly $100 million worth of softwood lumber annually — homebuilders say the policy is likely to increase prices rather than reduce dependence on foreign materials.
NAHB analyst Jesse Wade reiterated that point, saying, “These elevated trade barriers pose additional challenges for home builders who rely on Canadian lumber to meet construction demand.”
Despite national concerns, some Montana builders say certain material costs have stabilized. Steven Girod, owner of Wildcat Custom Homes in Libby, said lumber prices are not the main issue he is dealing with.
“I track it really closely and softwood, framing material, has for the most part held very steady for the last year,” Girod said, adding that OSB prices have even declined since the summer.
Instead, Girod said he’s seen a shift in demand. While the pandemic years from 2020 to 2023 brought nonstop construction activity, he believes the pace has cooled.
“Demand has gone down a good deal,” he explained. “If you look at your 2020 to 2023, it was just everyone going as hard as they could and couldn’t keep up. I would say it’s still busy, but demand isn’t there like it’s been in the past. People are looking at their numbers.”
Many potential clients, he said, are delaying building decisions due to economic uncertainty. “From what I see, it might be fear of the unknown, people aren’t sure exactly what the economy is going to do,” Girod added.
He said that while Flathead County remains consistently active, the surrounding rural counties of Lincoln and Sanders are seeing slower spillover demand.
Although lumber prices may be stable, Girod said labor costs continue rising sharply — and that has become one of the biggest contributors to higher home prices.
“I feel like materials have held steady, but I’ve had to pay my guys a lot more,” he said. He added that to retain skilled workers, he’s had to significantly increase wages. “The difference from several years ago, it has gone up a lot. I’ve had to increase pay for the guys I want to stay by a lot. The cost of living has gone up so much. That means my prices have to go up for what I charge. It’s a trickle effect.”
National data backs up this trend. According to NAHB, construction costs made up 64.4% of the average price of a home in 2024, a record high. Yet builder profit margins remained modest at 11%, barely rising over the last two years.
Nathan Martin, who runs Martin Construction in Hays with his wife, Danielle, said even small, family-owned businesses are feeling the pinch.
“You gotta pay guys what they’re worth, due to the cost of living,” he said. His top employee earns $28 per hour, far above typical rural rates, but necessary to keep workers.
While Martin hasn’t seen dramatic increases in materials, he said wages and benefits continue to rise. Still, demand for housing remains robust along the Hi-Line.
“We’re on the Hi-Line, and it’s very desolate, but housing is in demand hardcore,” Martin said.
Economists say Montana’s affordability crisis is a result of fast population growth, limited housing inventory, and restrictive zoning — all compounded by the cost pressures builders describe. Key points:
The state needs tens of thousands of units to stabilize prices, according to federal housing data.
Labor shortages and permit delays mean projects take longer, which increases financing and operational costs.
Projects reliant on tax credits or public funding often experience delays when materials and labor spike.
Even if some materials remain stable today, increased import costs could ripple through the supply chain in the coming year.
Originally reported by David Erickson Lee Newspapers in Bozeman Daily Chronicle.
