realestate

Trump's deportation plan: A potential impact on US housing markets

President-elect Donald Trump claims deporting undocumented immigrants will address the US housing crisis.

P
resident-elect Donald Trump has claimed that his plan to deport millions of undocumented immigrants will solve the nation's housing crisis. However, experts say this is a simplistic solution that ignores the complexities of the issue.

    Trump repeatedly linked immigration to high housing costs on the campaign trail, promising that mass deportations would lower home prices. He appointed Tom Homan as "border czar" and Stephen Miller as deputy chief of staff for policy, both known for their tough stances on immigration.

    But economists warn that widespread deportations could actually drive up labor costs in construction, making new homes more expensive. The Department of Homeland Security estimates 11 million unauthorized immigrants reside in the US, although Trump's supporters argue the number is higher.

    Construction employs an estimated 1.5 million undocumented workers, about 15% of the national workforce. If these workers were deported, builders would face significant challenges replacing them and paying for replacement labor.

    Most real estate economists agree that a dire shortage of homes is the root cause of the nation's housing affordability crisis. Residential construction activity has never fully recovered from the Great Recession, leaving an estimated shortfall of 1.5 million to over 7 million housing units.

    A spokesperson for Trump did not comment on his immigration plans and their impact on the housing market. Experts say that deporting undocumented immigrants would likely have a negative demand impact on the rental market, potentially easing pressure on home prices in the long term but not immediately.

    The evidence linking immigration to housing costs is mixed. While higher immigration levels can drive up local rents, the recent surge in home prices began before illegal immigration levels jumped. Undocumented immigrants are not qualified for conventional mortgages and make up a tiny fraction of new mortgage holders.

US President Trump's proposed deportation plan affects housing market stability nationwide.