Study Finds Immigration Crackdown Could Slow Housing Market
President Donald Trump‘s plan for mass deportations of migrants could dramatically impact housing availability and affordability in the nation, according to a study led by a University of Utah professor.
Published Feb 09, 2025 at 11:03 AM EST
Why It Matters
Americans are currently struggling with a housing affordability crunch which has hurt both buyers and owners. Home prices have skyrocketed since the pandemic, when demand exploded amid relatively low mortgage rates and a historic lack of inventory, and buyers engaged in cutthroat bidding wars.
After mortgage rates spiked following the Federal Reserve’s aggressive rate hike campaign which started in 2022, housing became even more unaffordable for Americans—but due to pent-up demand and chronically low supply, prices remained high.
What to Know
During his 2024 presidential campaign, Trump promised to make the housing market more affordable by boosting availability and increasing inventory. But some of his policies might backfire, experts have warned, further eroding affordability and threatening home construction in the country.
“We’re able to show that when you increase immigration enforcement, you do in fact generate a reduction in the number of individuals who are supplying labor to the construction industry in a given county,” Troup Howard, an assistant professor at the University of Utah and co-author of the study, told local KSL News.
“We show that those reductions in workforce are associated with a large decline in homebuilding.”
On the campaign trail last year, Trump said that deporting millions of undocumented migrants would positively impact the U.S. housing market by freeing homes for Americans and boosting inventory across the country.
But the study authored by Howard together with Mengqi Wang and Dayin Zhang of the University of Wisconsin-Madison found that the “staggered rollout of a national increase in immigration enforcement” could send “negative shocks” through the construction sector.
The study was published on the Social Science Research Network last year and remains under peer review for publication. Researchers analyzed what happened in counties across the nation after they implemented the federal Secure Communities program, which launched in 2008 and quickly became a masterplan of immigration enforcement efforts by Immigration and Custom Enforcement (ICE). By 2013, the program covered every county in the U.S.
Mass deportations, the researchers concluded, could cause drastic reductions in the construction sector’s workforce and residential homebuilding, while also sending home prices up.
When undocumented workers are deported, Howard, Wang, and Zhang wrote, “domestic labor only partially fills vacated construction jobs”—meaning that their removal doesn’t translate into more employment opportunities for U.S.-born citizens.
The absence of these workers ultimately results in net job losses for U.S.-born workers, especially in higher-skilled occupations, the researchers found.
“Say two lower-skilled jobs get vacated because workers are removed from the county. Roughly speaking, our results suggest that one of those jobs is going to be filled by an American, and the other one doesn’t get filled,” Howard told KSL News.
Additionally, “residential construction output is highly sensitive to these declines in labor supply,” they wrote: a drop in homebuilding leads to higher home prices, “with any demand-side downward pressure on home prices linked to increased deportations” being “temporary and quickly dominated by the supply-side impact.”
What People Are Saying
Danielle Hale, Realtor.com chief economist, previously told Newsweek: “Restricting immigration could make it more difficult for companies to hire workers in the near-term, and that impact is likely to be acutely felt by a construction industry that employs many foreign-born workers.”
Cynthia Seifert, founder of real estate seller leads generator KeyLeads, previously told Newsweek: “Immigration restrictions could lead to labor shortages in the construction industry, increasing costs and possibly slowing down project timelines.”
Christian Faes, founder and CEO of Faes & Co, previously told Newsweek: “I do know that there are a lot of property developers who are worried that if Trump proceeds with the mass deportation of undocumented immigrants, then this could push up labor costs—which is obviously a key component for housebuilders.”
However, Faes thinks that any negative effects of Trump’s planned deportations “would be significantly outweighed by having a lower tax environment with less regulations,” which the president has also proposed.
What’s Next
The researchers behind the study conclude, unlike Faes, that Trump’s promise to deregulate the sector and boost homebuilding might not be enough to offset the impact of a reduction in the construction workforce and increase supply.
“One immediate implication of this is that zoning reform or streamlining, often touted as a necessary step for increasing housing supply, may not be sufficient,” they wrote. “Even if localities stand ready to build more homes, this paper suggests that important frictions may exist in finding the individuals to do the building.”