How Trump’s Plan To ‘seal The Border’ Impacts Housing Construction And Affordability

A recurring theme of president-elect Donald Trump‘s campaign efforts is ramping up as his incoming administration intends to “seal the border” and deport millions of immigrants in 2025. This move has caused housing industry professionals to wonder how efforts to build more homes will hold up.

In 2023, the housing industry accounted for 32.9% of all consumer spending, according to data from the U.S. Bureau of Labor Statistics (BLS). This share represented the largest portion of expenditures, easily outpacing transportation (17%) as the next closest category.

A recent Redfin report highlighted a significant share of immigrants who occupy the construction labor force. Citing data from the National Association of Home Builders (NAHB), Redfin found that immigrants make up about 30% of the construction labor force, and nearly half of this group are undocumented.

Supply growth was vital to NAHB’s efforts to correct a nationwide housing shortage of 1.5 million units. In a recent statement, NAHB chief economist Robert Dietz said that “by the end of 2025, we expect rates to be in the high 5% range. This is good news for builders, housing demand and housing affordability.”

“Increasing the nation’s housing supply will not only help tame inflation but also ease the nation’s housing affordability crisis by moving toward a healthy supply-demand balance in the for-sale and rental markets,” NAHB added.

The Trump administration’s attitude on undocumented immigration could block further progress for increasing new-home supply. Redfin believes that his administration’s deportation policies will mean “less labor supply, a weaker labor market, and less economic growth,” equating to less residential construction, limited supply growth and rising home prices.

But some of Trump’s constituents don’t believe that decreased immigrant labor will negatively impact housing construction. Vice president-elect JD Vance described the idea that immigrants are needed for housing construction as “deranged” in an appearance on “The Interview” podcast with The New York Times.

“People say, well, Americans won’t do those jobs. Americans won’t do those jobs for below-the-table wages. They won’t do those jobs for non-living wages. But people will do those jobs, they will just do those jobs at certain wages,” Vance said.

He later added that companies should search “in their own country, for their own citizens” while describing immigration as “one of the biggest drivers of inequality.”

The Trump administration plans to implement several policies to counteract the impacts of decreased immigrant construction labor on housing supply and affordability. These include potential tariffs — or import taxes — to boost domestic manufacturing. Trump will reportedly impose a tariff of at least 60% on goods from China, along with a tariff of 10% to 20% for all other countries.

Economists and other experts say this could negatively impact housing affordability by increasing building material prices. Costs for construction materials have risen 38.8% since February 2020, according to an Associated Builders and Contractors (ABC) analysis of BLS data.

Analysts also predicted a “deregulation boost” to reduce red tape for the mortgage market. Following that, Trump also promised to address construction regulations — something that he and Democratic challenger Kamala Harris agreed on.

Still, the impact of the Trump administration’s potential immigration policies will remain unclear until he enter office in January. Meanwhile, on social media, the administration confirmed plans to declare a national emergency and use military assets to enact mass deportation.