How Trump’s Mass Deportation Plans Could Shake Up Home Prices Across the Nation

How could Trump’s plan to deport millions of people impact home prices?

President-elect Donald Trump is aiming to deport approximately 11 million undocumented immigrants. Mass deportation efforts could impact the construction workforce, driving up labor and home costs.

Key Takeaways

• Trump claims mass deportation will lower home prices, but critics argue that this plan could have the opposite effect.
• Undocumented immigrants make up a significant portion of the new home construction workforce. Their deportation could negatively impact the labor market.
• More expensive labor could slow home construction and drive up home prices.

The Impact on the Labor Market

Estimates of the number of construction workers who are undocumented immigrants vary, but the number is significant. The Center for American Progress estimates 23%. Depending on the state, that number could be much higher. More than half of the construction workforce in Texas could be undocumented.

If these people are successfully deported, a significant gap will be left in the construction workforce.

The housing shortage in the United States has been steadily growing worse since the Great Recession. The US market is short millions of homes. Real estate company Zillow estimates the shortage will increase to 4.5 million homes in 2022. That deficiency means costs for homebuyers and renters are becoming more unaffordable.

There is currently a shortage of skilled construction workers to meet the demand for more homes. Removing undocumented construction workers would worsen this shortage.

The Impact on Home Costs

President-elect Trump has claimed that undocumented immigrants are responsible for driving up housing costs, but many economists have refuted that claim. Experts point out that undocumented immigrants do not make up a significant portion of homebuyers. They are more likely to be renters.

The home shortage, rather than undocumented immigrants, is the predominant factor in the ongoing housing affordability issues.

If mass deportations do not reduce competition for homebuyers and they cut an already strained workforce, homebuyers could be facing the consequences of high demand and higher construction costs.

The impact of deportations on the labor market is not the only policy proposed by Trump that could impact home prices. He has stated plans to enact significant tariffs on imported goods. Those tariffs could drive up the price of construction materials, contributing to a rise in home costs.

Higher construction labor and material costs could slow development and compound the housing supply deficit. If supply remains low and demand remains high, the price of homes will continue to climb.

The Bottom Line

If mass deportations begin in 2025 the existing shortage in the U.S. home supply could quickly get worse due to the loss of skilled construction labor and a disruption in new housing starts, which will inevitably put upward pressure on home prices.