Trump's mass deportation plan raises concerns over potential impacts on US housing market

President-elect Donald Trump has proposed a plan to deport millions of undocumented immigrants, which he claims will address the nation’s housing crisis. However, experts in the housing industry suggest that the situation is more complex.

During his campaign, Trump frequently attributed high housing costs to illegal immigration and promised that executing "the largest deportation operation in American history" would decrease home prices. At a rally in Arizona, Trump stated, "Immigration is driving housing costs through the roof."

Following his election win, Trump announced Tom Homan as his choice for "border czar," overseeing deportations. Homan previously served as acting director of Immigration and Customs Enforcement during Trump's first term and supports widespread deportations. Stephen Miller has also been appointed deputy chief of staff for policy; he is known for his strong stance on immigration.

The Department of Homeland Security estimates around 11 million unauthorized immigrants reside in the U.S., though Trump and supporters believe this number could be higher. Trump's argument suggests that removing these individuals will lower housing competition, thereby reducing costs for Americans. However, economists warn that mass deportations might increase new home expenses by raising labor costs.

Joel Berner, Realtor.com® senior economist, explains: “Mass deportation would seriously dampen the residential construction labor force. Not only would builders have to replace workers, which takes time and money to do, but they’d likely have to pay more for replacement labor in the future.” He adds that potential tariffs on construction materials could further drive up costs.

Construction employs approximately 1.5 million undocumented workers according to the Center for Migration Studies of New York. This represents about 15% of the national workforce in this sector with higher concentrations in states like Texas.

Jim Tobin from the National Association of Home Builders notes: “Anything that provides a shock to the labor force could have significant implications on the home building industry and our labor supply." The current shortage of skilled labor already affects construction pace and increases home prices.

Despite Trump's claims linking immigration to housing costs, evidence remains mixed. Undocumented immigrants are generally not eligible for conventional mortgages but can purchase homes using cash or unconventional mortgages—only a small fraction compared to foreign buyers outside the country who purchased significantly more homes last year.

Gary Acosta from the National Association of Hispanic Real Estate Professionals remarks: “The number of homes that are purchased by undocumented individuals is not even a blip on a radar.” Conversely, foreign buyers living abroad had a larger impact on price points with their purchases last year.

Academic studies indicate local rents may rise slightly with population increases due to undocumented immigrants being more likely renters than buyers. Berner suggests mass deportation might negatively affect rental demand but any easing pressure on home prices would take time rather than having an immediate effect.

A spokesperson for Trump did not comment on how these immigration plans might impact housing markets directly.