Home Depot, Lowe’s Rival Files Chapter 11 Bankruptcy

While they have been a moving target, President Donald Trump’s tariffs have increased the cost of building new homes.

“The new tariffs could increase builder costs by $7,500 to $10,000 per home,” Rob Dietz, chief economist for the National Association of Home Builders, told CNBC, citing estimates from U.S. home builders. Last year, the NAHB estimated that every $1,000 increase in the median price of a new home shuts out about 106,000 potential buyers.

So far, the biggest impact has been felt in lumber prices, “which are expected to average $4,900 per home, according to America’s Leading Builders, a trade group representing the nation’s publicly traded homebuilders,” the website shared.

While the United States produces some lumber, one-third of all lumber purchased for home construction comes from Canada. Domestic lumber producers typically raise prices to match import prices.

Rising lumber prices hurt the entire home building industry, and the lack of certainty adds complexity to the home building process, Steve Martinez, president of Tradewinds General Contracting in Boise, Idaho, shared with NAHB.

“Our contracts are all fixed price – meaning from the time we bid on a project to the time we order the materials, prices can change drastically,” explained Martinez. “But we’re trying to pre-order as much material as possible.”

As rising and volatile prices impact major players like Home Depot, they are better able to mitigate and predict the impact than smaller retailers.

North American Builder’s Supply, Illinois-based Home Depot and Lowe’s rival, has filed for Chapter 11 bankruptcy protection.

The company remains open and plans to reorganize and continue its operations, according to data shared by RK Consultants on X, formerly Twitter.

“North American Builders Supply, Inc., a Yorkville, Illinois-based building materials supplier, filed for Chapter 11 protection in the Northern District of Illinois on December 3, 2025. The company reported between $500,001 and $1 million in both estimated assets and liabilities,” according to the filing.

The filing lists several trade creditors and lines of credit among its largest unsecured claims. Major unsecured creditors include Bluetape, Inc. ($503,219), Kapitus Servicing, Inc. ($149,596), and includes the unsecured portion of the claim of Central Bank of Illinois ($94,131).

• North American Builders Supply has reportedly filed for bankruptcy protection – a Chapter 11 filing December 3, 2025.
  Source: RK Consultants

• The claims, including a lawsuit from lender Provencher Capital LLC, appear to stem from the financial crisis.
  Source: Trellis Law

• The legal complaint shows Provencher Capital’s alleged unpaid liability by North American Builders Supply (and/or one of its officers), indicating that the bankruptcy involves creditor pressure and litigation.
  Source: Trellis Law

• Because the bankruptcy protection is Chapter 11, the company may be trying to reorganize rather than liquidate outright (at least initially).
  Source: RK Consultants, Pacer Monitor

The bankruptcy was also reported daily by Distressed Asset Central, which assigned case number, 25-18572, to the Illinois Northern Bankruptcy Court. That report shows the Chapter 11 filing was voluntary.

Larger home improvement and builder supply chains have the ability to lower tariffs than their smaller rivals.

In a third-quarter earnings call, William Bastek, Home Depot’s executive vice president of merchandising, commented on the charges.

“More than 50% of our inventory is not part of the tariff and is obviously a domestic source. So we will continue to watch it and look forward to Q4,” he shared.

In some cases, Home Depot can mitigate tariff-related price increases by not offering as many discounts.

“If you think about our work, which is to help impact some of the tariff pressure, a little bit less promotion in a couple of those garden sectors is just the nature of the work we did in Q2. And again, 4 of those 5 categories that we saw an impact on were related to some lower-ticket garden projects,” he shared on the chain’s second-quarter earnings call.

Lowe’s CFO Brandon Sink talked about how the tariffs will affect his company’s inventory.

“Inventory ended Q3 at $17.2 billion, approximately $400 million less than the prior year. This net decrease also reflects the inclusion of inventory from recent acquisitions of approximately $600 million and higher tariffs,” he shared on Lowe’s third-quarter earnings call.

He said that this is an ongoing target problem that the company is monitoring.

“We continue to see tariffs, they ramp up here in Q3, we continue to ramp up in Q4 as well, and expect the ramp to impact the first half of the year. So managing that and trying to understand how that impacts both sales margin and operating margin,” he added.

“Canadian lumber climbed 14.5%. Concrete prices jumped 8%. Appliances were expected to rise 20%. Suddenly, the question wasn’t how to build affordably — it was whether starter homes could be built profitably at all,” Cotality/CoreLogic shared.

“Yet without new housing supply, existing home prices will only continue to rise, pushing affordability out of reach.”

When someone is currently building a new home in Florida, there is risk to both the builder and the buyer. When you sign a contract to build a new home, you lock in a price.

If the cost of materials goes down, the builder makes more money, and you pay more. If they go up, the builder risks losing money, which means that in volatile times, builders usually add extra margin, which increases costs for home buyers.

“Already, the average cost of new construction in the United States is $422,000. Potential material cost increases from tariffs would add between $17,000 and $22,000 to that price tag,” Cotality data showed.

RELATED: Lowe’s Announces Free Offer for Customers Amid Struggle

This story was originally published by TheStreet on December 4, 2025, where it first appeared in the Retail section. Add TheStreet as a preferred source by clicking here.