President-elect Donald Trump's hard-lined immigration policies are likely to have implications for housing markets throughout the country, but not necessarily the
Mark Zandi, chief economist for Moody's Analytics, said the total reduction in housing demand from such policies is likely to be minimal. Meanwhile, if the administration indeed halts all immigration — authorized and unauthorized alike — the resulting increase in labor costs could hamper housing production.
"Not quite a third of all the workers in the construction trades are immigrants, so if you deport those folks and allow less immigrants in, as a country, you're not going to build as many homes," Zandi said. "You might get less demand, but also less supply. So, the net of all that is certainly not going to solve the crisis with regard to affordable housing. It's just not happening."
As of the middle of 2022, there were roughly 11.3 million unauthorized immigrants in the U.S., according to estimates from the
Regardless of the total figure, reducing it to zero is a tall task for any four-year term. The record for most expulsions between presidential elections occurred from 2005 to 2009, when then-President George W. Bush oversaw 5 million removals, according to MPI.
Some say any additional housing that is opened up thanks to Trump's immigration policies would be a welcome development in the current supply-constrained environment. Ed Pinto, head of the right-leaning think tank American Enterprise Institute's Housing Center, estimates that Trump's policy could result in 2 million deportations during the next two years. He believes that would lead to a significant uptick in housing availability.
"These people are living somewhere, right? The ones that aren't in prison. And my guess is it would free up 500 to 700,000 housing units, which is about 50% of a year's production," Pinto said. "Well, that's, that's nothing to sneeze at, over two years."
The exact correlation between unauthorized immigration and housing prices is tenuous and underexplored, said Jung Choi, a researcher with the Urban Institute's Housing Finance Policy Center. While immigration does appear to put upward pressure on housing prices, particularly in already supply-constrained areas, she said the impact appears to be minimal.
What is clear, Choi said, is that however many immigrants are driven out of the country, the impact on housing supply will not be one-for-one. The
"It's very, very difficult for undocumented, illegal immigrants to become homeowners in this country, and also it's very difficult to rent because they need to either put down a greater deposit or find somebody to provide some kind of credit assurance to the landlord. So that's why most illegal immigrants choose to live — or need to live — in a household where there is a legal immigrant in place," Choi said. "That means that even if we are able to deport a large number of illegal immigrants, the impact on freeing up housing supply would be very, very limited."
The distribution of unauthorized immigrants throughout the country largely reflects overall population totals. The four most populous states, California, Texas, Florida and New York, are home to the biggest estimated populations of unauthorized migrants, according to Pew. New Jersey, the 11th most populous state, rounds out the top five.
Recent years have seen migration patterns break away from those large population centers, with New Jersey, Massachusetts and Maryland seeing outsize growth in undocumented immigration between 2019 and 2022, while California — the only state Pew identified as losing undocumented immigrants — saw a net outflow of 120,000 during that period. Still, the top growth markets have been Florida, Texas and New York.
"The large majority of illegal immigrants are in the top four or five most expensive cities and the states in the U.S.," Choi said. "So, I would be very surprised if [mass deportation] had any kind of depreciation pressure on the housing market."
Where the impact of fewer immigrants could be felt more acutely is in the labor market and the broader economy. Despite making up just 3.3% of the total U.S. population, unauthorized immigrants were about 4.8% of the national workforce in 2022, according to Pew, with that share having likely grown during the past two years.
This overrepresentation has contributed to the working-class animosity toward migrants that has fueled Trump's political ascendance, but it has also had undeniable benefits to the economy. Researchers from the Peterson Institute for International Economics project that Trump's immigration policies could cause U.S. gross domestic product to fall by 7.4% by 2028, while overall employment could drop by as much as 6.7%.
The recent surge in immigration has also been a moderating factor for inflation, according to Federal Reserve officials. Fed Chair Jerome Powell has credited the recent uptick with helping cool the nation's overheated job market in recent years, easing upward pressure on wages and enabling the U.S. economy to grow despite rising interest rates and other global headwinds.
"We don't have a view on the right level of immigration. That is for the voting public and their elected representatives, but what we saw over 2023 and 2024 was a surge in immigration and also a surge in the labor force, and it certainly pushed up economic growth," Powell said during
For the construction trades, changes in immigration could have significant impacts. According to the National Association of Home Builders, or NAHB, foreign-born workers make up about 30% of the housing construction labor force. The organization does not track data on authorization status, but analysis of Census data by the Center for American Progress in 2021 determined that 23% of overall construction laborers were undocumented.
A significant share of construction laborers enter the country on what are known as H-2b visas, which permit them to work in nonfarming jobs on a seasonal basis. Based on Trump's first term in office, changes to this program are expected to be minimal.
But with more job vacancies across other immigration-dependent sectors — including leisure and hospitality — Jeffrey Roach, chief economist with the advisory firm LPL Financial, said the homebuilding sector could face more competition for workers, which could in turn drive up costs.
"Whenever you think about what may be a change in immigration policy, that's certainly going to affect available workers," Roach said. "Building labor costs could increase, that's certainly a fact."
Despite these looming labor issues, Roach said homebuilders are bullish about their prospects under the incoming Trump administration. With its emphasis on deregulation, he said, construction firms believe it will be easier to acquire, subdivide and, ultimately, develop land.
The net impact of higher labor costs and lower regulatory costs remains to be seen. Other factors, such as falling interest rates and potential tariffs on building materials, will also factor into the supply side of the market. As far as demand goes, the near-term implications appear marginal at best. Zandi said the longer-run demand change could be more significant, but is unlikely to favor homebuilders, homebuyers or their financiers.
"If you have fewer people, you have less demand and fewer mortgages are going to be originated," Zandi said. "If you're in that business, then that's going to hurt you in the longer run. Not next year, not the year after, but over the next 10 years, that's going to be a weight on your business."
