From News To Moves
Mass deportations and shrinking construction labor could trigger a housing supply shock. Here’s why policy, not interest rates, may be the next big driver of real estate prices, and here’s where you should position yourself.
By Austin Payne
Immigration crackdowns are usually framed in terms of politics or policy. But this time, the bigger story may be real estate. ICE is weighing a first-ever, government-operated deportation airline, with reports pointing to a 30-plane fleet capable of deporting a million people a year. The target of this action is, ironically, the same immigrant workforce that currently makes up nearly half of America’s construction labor force.
That means fewer workers to build homes, slower housing supply, higher costs, and a windfall for the few companies positioned to survive the squeeze. This may explain why Warren Buffett just placed new bets on America’s largest homebuilders.
Nationwide, immigrants make up 42% of workers in the construction sector. Immigrants also constitute a majority in certain areas of the construction industry. For instance, they make up 61% of drywall & ceiling installers and plasterers & stucco masons, and over half (52%) of roofers.
The problem? The industry already faces a labor shortage, so when the planes take off, the cranes will slow down. Deportations on the scale currently discussed could remove more than 1.4 million construction workers from the field. That would be catastrophic for housing production, limiting supply at the exact moment the country needs more homes.
History offers a warning. During the Obama administration’s Secure Communities program, which averaged 75,000–84,000 deportations annually, construction output dropped measurably. Researchers found counties missed out on nearly a year’s worth of new residential supply. This led new home prices to rise by 16–18%.
The deportation under Obama was done with a fraction of the enforcement power Trump is planning. Trump’s blueprint is more than 13 times larger in scope, and the potential impact on home prices could be far more dramatic. ICE may end up raising home prices more than the Fed ever could.
Mass deportations won’t hit all builders equally. Smaller contractors, who depend on local crews, will be squeezed hardest. They won’t have the ability to replace workers quickly or move teams between regions. Many of their projects will stall or be abandoned entirely.
But national builders (companies with scale, capital, and land already banked) can absorb the shock. D.R. Horton and Lennar, the country’s two largest homebuilders, have regional flexibility, deep land inventories, and their own mortgage divisions. They can pay up for labor, shift crews across states, or lean on prefabrication and automation to bridge gaps.
This is where Warren Buffett comes in. Through Berkshire Hathaway, he has stakes in both D.R. Horton and Lennar. It’s a classic Buffett move: don’t speculate on the policy itself, but buy the infrastructure that benefits from the policy. In this case, Buffett is betting that scale will beat scarcity.
Mass deportations could strip over 1.4 million workers from U.S. construction, choking supply and driving home prices higher. National builders and rental operators stand to gain, and construction ETFs offer upside and diversified exposure to a housing shortage play. To learn more about each of our top choices, click below:
Immigration policy, not interest rates, could bring the next housing shock. ETFs like ITB, XHB, REZ, and VNQ position investors to capture gains from rising home prices, tighter rental demand, and the resilience of large-scale builders as labor supply shrinks.
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