Homebuilders Say ICE Crackdowns Are Squeezing Labor Supply

Homebuilders are flagging ICE enforcement as a real drag on job sites. In a new survey, homebuilders around the country say ramped-up Immigration and Customs Enforcement crackdowns are creating huge headaches for their businesses.

What the survey found

“ICE is becoming a very large issue and causing labor shortages,” a Houston builder said in a survey conducted earlier this month by John Burns Research and Consulting, which regularly asks homebuilders about market conditions.

The remarks in the homebuilder survey were unprompted, says Rick Palacios, director of research at the consulting firm. All the firm asked about on the topic was construction cycle times. The comments on ICE and immigration were completely unsolicited.

A builder in Richmond, Virginia said ICE has had significant impacts to vendors throughout Virginia and Maryland in the last 90 days, with a major impact on cycle times and the ability to start new houses.

Why it matters for the industry

The labor strain comes on top of other challenges for the industry: rising mortgage rates, higher prices for key inputs driven by tariffs and the Iran war, as well as growing competition for resources with builders of data centers.

Immigration raids discourage legally authorized workers from reporting to job sites, Bill Owens, chairman of the National Association of Home Builders, recently said. Higher mortgage rates and rising material costs are also weighing on the industry. Building material costs are up by a median 6.7% from last year, according to one NAHB survey.

Do you want to see how to make more plays? Do you want to find gains yourself?

Unusual Whales helps you find market opportunities through our market tide, historical options flow, GEX, and much, much more.

Create a free account here to start conquering the market with Unusual Whales.

The scale of enforcement

The strains come after three straight months of record ICE arrests. In August the agency said it arrested 50,925 people across the country, the highest number of “illegal aliens” arrested in a single month. These arrests have been less conspicuous than high-profile raids that came early in the year, but impactful.

Immigrants made up more than 26% of the construction workforce in 2024, the most recent Census Bureau data on the industry.

The administration’s response

“ICE is not arresting people legally in the country,” said White House spokesperson Lauren Bis, adding there is no shortage of American minds and hands to grow the labor force. The administration has said its new Office of Immigration Policy will help employers navigate immigration policies.

Options market and stocks to watch

Labor tightness on top of rate and materials pressure could pinch margins and cycle times for the publicly traded builders. Watch for:

DHI (D.R. Horton): the largest US builder by volume, most exposed to Sun Belt labor pools where enforcement has been active.

LEN (Lennar): watch for commentary on cycle times and incentives on the next earnings call.

PHM (PulteGroup): higher-price mix could absorb some labor cost creep, but starts guidance is the tell.

KBH (KB Home): entry-level exposure means margin sensitivity to trade costs is highest here.

TOL (Toll Brothers): luxury builder with longer cycle times, watch for delivery slippage.

For broader coverage, see other news.

Want more market intelligence? Create your free Unusual Whales account for options flow, market tide, GEX, and the full toolkit.