President-elect Donald Trump’s incoming administration plans to “seal the border” and deport millions of undocumented migrants from the United States, starting in 2025. The housing market relies on immigrants as part of the construction labor force and could be impacted by the deportations, depending on the size and scale of the operation.
Immigrants make up around 30% of the construction labor force, so restricting immigration will make housing more costly to build. The recent immigration surge under President Joe Biden has been a key part of the labor market’s surprising resilience in the face of the Fed’s aggressive rate hikes. Border crossings are already on the decline, but further declines under Trump’s new administration will mean less labor supply, a weaker labor market, and less economic growth. Goldman Sachs forecasts that net immigration will slow to about 750,000 per year, due to the Republican sweep of congress. That’s down from the roughly 1 million per year average from 2017 to 2019 and down dramatically from the peak of around 3 million reached in 2023.
Critically for housing, plans to deport undocumented migrants—who make up an estimated 14% of the construction work force—will lead to much less labor supply for the industry. That means there will be less residential construction, which will put a cap on supply growth and potentially push up home prices.
Recent immigrants are also unlikely to account for much housing demand, so limiting immigration will not help to reduce demand by much. The initial impact on housing demand will be minimal, as recent immigrants tend to produce little housing demand because they are largely housed in public housing, or with family and friends. In the medium to long term, however, more immigrants does mean more housing demand.
The immigration surge under Biden means there may be more housing demand in the medium term, but less immigration under the Trump presidency will bring down housing demand a bit in the future.
Trump has promised to use a range of other policies to make housing more affordable, which could counteract some of the impact from his immigration policies. These are likely to include lowering taxes, loosening lending standards, cutting the red tape builders face to construct new homes and opening up federal land for housing development.
