President-elect Donald Trump’s proposal to remove millions of undocumented immigrants could jeopardize one of the few positive aspects of the housing market in recent years: new home construction. A mass deportation could lead to labor shortages in the homebuilding sector, as a recent report by Redfin revealed that immigrants account for approximately 30% of the construction workforce, with almost half being undocumented.
Gary Acosta, co-founder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP), foresees challenges ahead.
“It is likely to have a detrimental impact, and possibly a severe one, on construction labor forces in various markets across the United States,” Acosta stated. “The construction industry has relied on immigrant labor for a significant period, which is well-documented. They are discussing visits to work sites and conducting sweeps in those markets. We anticipate that this will affect the workforce of individuals who are on the edge, possibly even in the process of formalizing their status.”
Given the rise in mortgage rates, new home sales have surpassed existing home sales because builders have been able to lower rates to attract buyers — a crucial element in an increasingly unaffordable housing market. A significant change in the labor force could disrupt this advantage.
Acosta mentioned that the fear of mass deportations will hinder construction companies from retaining existing labor and recruiting new labor for upcoming jobs. He emphasized that the impact extends beyond the housing and construction sectors.
“It will extend to the restaurant industry, the hospitality industry…Immigration has unfortunately been portrayed as a social policy issue in a highly emotional manner, with discussions about crime and other negative aspects that immigration supposedly brings, most of which I believe are unfounded,” Acosta remarked. “People are viewing it purely from a social policy standpoint, rather than an economic perspective. If viewed solely from an economic angle, I believe opinions would differ significantly from what they currently are.”
Acosta approached the issue from a mathematical standpoint, stating, “Mathematics is impartial.” In a scenario of low housing inventory and already low unemployment rates, mass deportations would exacerbate the situation.
“It will take years, if not decades, to train a workforce to fill these job vacancies. There are approximately 11 million unfilled job positions in the United States currently, and the only way to fill these positions is through sensible immigration policies. It won’t happen through natural population growth or people suddenly entering the workforce. We are facing a workforce deficit, and worsening this deficit is not the solution,” he emphasized.
Stephen Kim, senior managing director and head of the Housing Research Team at investment firm Evercore ISI, regularly communicates with homebuilders and believes that this situation could significantly impact housing production throughout 2025.
Kim noted that while contractors sometimes have to ensure that all team members are documented citizens, many believe that there are undocumented immigrants working on construction sites. “Furthermore, many individuals in the industry estimate that a significant number — not just 1 or 2%, but a substantial portion — of workers in the industry are undocumented. They might not be working on their homes, but they are present and contributing to projects,” he explained.
Kim also mentioned that large-scale deportations may not heavily affect housing demand. “Immigrants tend to live in larger households, and it’s the household that occupies housing…I don’t want to sound insensitive, but if a household has seven members and two are deported, there will still be five individuals in need of housing,” he elaborated.
However, Kim acknowledged that the outcome is contingent on Trump’s actions once in office, indicating that no builders he has spoken to have definitive plans to scale back construction projects or act more cautiously.
“If authorities were to appear at a construction or homebuilding site and start rounding up immigrants, word would spread quickly, and workers would likely be cautious about showing up for work the next day,” Kim predicted. “I don’t foresee workers quitting and never returning. They need employment, but they will be cautious…there may be a period where they are absent…nonetheless, delays will occur.”
Mass deportations could have a more pronounced impact on housing in certain states. A recent NPR article highlighted that Texas — a hotspot for home construction — had over half a million immigrants working in construction in 2022, with nearly 60% of them being undocumented, double the national average. Ironically, Texas state officials have committed to allocating 1,400 acres of state land for a potential new deportation facility if requested by Trump.
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