"Mass deportation could deprive US builders of badly needed workers and labor costs would rise and ultimately be passed on to buyers," per BI

"Mass deportation could deprive US builders of badly needed workers. Labor costs would rise and ultimately be passed on to buyers," per BI.

Donald Trump’s commitment to curb immigration may spell trouble for hopeful homebuyers priced out of today’s housing market.

If reelected, Trump has pledged to lead the largest deportation campaign in U.S. history, which could see as many as 1.2 million deportations, though the country has around 11 million undocumented residents.

While opinions differ on whether such a plan is feasible, a rapid decrease in the immigrant labor force could severely impact U.S. construction, further straining affordability for prospective homebuyers.

The essential role of immigrant labor in homebuilding
“If we saw large-scale deportations, I think it would have a chilling effect on the labor market,” Jim Tobin, CEO of the National Association of Home Builders, told Business Insider.

Immigrants play a crucial role in alleviating the homebuilding industry’s skilled labor shortage, Tobin said. Foreign-born workers comprise up to a third of the sector’s labor force, often specializing in trades like plastering and drywall installation that are essential to building homes, according to the Home Builders Institute.

“Government data consistently shows a shortfall of 200,000 to 400,000 workers in our industry, which slows down construction, increases labor costs, and ultimately raises home prices and slows homebuilding,” Tobin explained.

A 2022 study from the George W. Bush Institute found that U.S. metro areas with the greatest growth in immigrant populations also had the lowest construction costs. History suggests that without these workers, housing costs will climb.

A recent research paper found that counties impacted by the “Secure Communities” program—a 2008-2014 crackdown leading to over 300,000 deportations—saw rising home prices as a result. Price effects were limited for two years after enforcement began, but by the third year, new construction prices in these counties averaged 17% higher than baseline levels, a $57,300 increase from the average price before the program.

The study noted that three years after the program’s rollout, “the average county forewent a year’s worth of residential construction: 2,423 fewer building permits issued, and 1,997 fewer newly built homes available,” the authors wrote.

Experts told BI that Trump’s proposed deportation efforts would likely prompt homebuilders to raise wages to attract domestic workers, competing against other industries reliant on immigrant labor.

Tobin noted that mass deportations would also require the homebuilding industry to intensify efforts to recruit new, domestic talent in the skilled trades.