Immigrant Workers Power America's Homebuilding Boom

The American homebuilding industry is powered by a workforce that is increasingly foreign-born, especially in the nation's most active construction markets. New research from Harvard's Joint Center for Housing Studies reveals a direct correlation between the volume of homebuilding and reliance on immigrant labor.

In the seven metro areas that issued at least 150,000 residential building permits between 2019 and 2023, an average of 54% of construction trades workers were foreign-born. This dependency creates a complex dynamic as federal immigration policies shift, threatening to exacerbate an existing nationwide worker shortage.

The data shows a clear pattern: the busier the construction site, the higher the percentage of immigrant workers. The seven metro areas leading the nation in homebuilding—from Los Angeles and Washington, D.C. to Dallas and Houston—rely on workforces that are often more than 60% foreign-born.

Dallas-Fort Worth-Arlington stands out as the national leader, issuing the highest number of new building permits during the 2019-2023 period. During that time, 61% of the area's construction workers were immigrants. The trend is even more pronounced in Miami-Fort Lauderdale-Pompano Beach, where nearly three-quarters of construction workers were foreign-born.

"There's demand for labor in these places because there's so much homebuilding activity, and that is what creates the economic opportunity for immigrants to come in and fill these positions, especially if they're positions that native born people aren't as likely to work in."

The reliance decreases as building activity slows. In metro areas that granted between 75,000 and 149,999 permits, an average of 40% of workers were foreign-born. In markets with fewer than 75,000 permits, that figure dropped to 22%.

The construction industry is already grappling with a nationwide worker shortage estimated in the hundreds of thousands. Federal immigration policies, including mass deportations and restrictions on immigration, threaten to deepen this shortfall significantly.

Anirban Basu, chief economist at the Associated Builders and Contractors, notes that the industry's heavy reliance on foreign-born workers makes it particularly vulnerable. A recent survey by the Associated General Contractors of America found that 28% of construction firms have been affected by immigration enforcement.

The impact is already measurable:

• More than 90% of hiring firms struggle to fill open roles
• 45% of all firms report project delays due to worker shortages
• Immigrants make up an estimated 15-23% of the total construction workforce

While the Trump administration states it is working to streamline visa applications for temporary workers and boost vocational training, industry groups argue these efforts fall short of addressing the immediate labor gap.

The consequences of a shrinking labor pool extend far beyond construction sites. Economists and housing researchers expect the most dynamic U.S. housing markets to be hit hardest by rising construction costs, driven by higher labor expenses and project delays.

Riordan Frost, a senior research analyst at the Harvard Center and author of the report, warns that the markets most reliant on immigrant labor will feel the effects most acutely. This could hamper their ability to respond to housing supply and demand needs.

"There's no question in my mind the stepped-up immigration enforcement is serving to drive up construction delivery costs," Basu stated.

The economic implications are stark. If communities cannot supply enough new housing, economic growth tends to stagnate. Basu further noted that the construction workforce is set to become more expensive, and when combined with rising healthcare costs and electricity rates, households will face even more pressure.

While the immediate outlook suggests a worsening shortage, long-term solutions are on the horizon. Improvements in construction productivity, specifically the growth of modular and factory-built housing, could eventually ease the labor burden.

Additionally, a growing number of women and young people entering the industry offer hope for diversifying the workforce. However, these shifts will take time to materialize.

For the next several years, the worker shortage is projected to intensify, driving up building costs and home prices. The White House maintains that there is "no shortage of American minds and hands" to grow the labor force, emphasizing a commitment to capitalizing on domestic potential while enforcing immigration laws.

Yet, the data suggests that for the foreseeable future, the cost of building a home—and the labor required to build it—will remain a central economic challenge.

The intersection of immigration policy and homebuilding is creating a pivotal moment for the U.S. housing market. The nation's busiest construction hubs are deeply dependent on a foreign-born workforce, a reality that current policy shifts are challenging.

As labor costs rise and delays increase, the affordability of new housing is at risk. The coming years will test the industry's ability to adapt through technology and workforce development, but the immediate pressure on the most active markets is undeniable.