The cost of home construction in the United States is rising as immigration and trade policies continue to impact labor availability and material prices.
A report by The New York Times details how tariffs and workforce shortages are driving up expenses for builders across the country, with one homebuilder in Phoenix projecting that costs could increase by more than $236,000 under current policies.
According to the report, nearly one in four construction workers in the U.S. are noncitizen immigrants, with much higher concentrations in key trades. The labor-intensive nature of construction means that any disruptions in workforce availability can significantly affect costs.
The aforementioned Phoenix homeowner, whose name is Nathan Anderson, estimated that without immigrant workers, his labor expenses could rise by 17%, adding $116,000 to his budget. Material costs are also affected by tariffs, with potential increases of nearly 5%.
The Times resorted to The Observatory of Economic Complexity to examine the impact of tariffs, including a 25% global tariff on aluminum and steel, and additional levies on Canadian, Mexican, and Chinese imports. The organization, which tracks trade and tariff data, found that materials such as cement, drywall, and lumber could see price hikes of 18%, 22%, and 4% respectively.
When taking a granular look at Anderson's home, for example, the foundation, which originally cost $58,200, could rise by 25% in labor and 18% in materials. Roofing, dominated by immigrant labor, could see a 30% rise in labor costs. Flooring installation could cost 30% more in labor, while drywall material costs could increase by 22% due to heavy reliance on imported gypsum.
Given these rising costs, Anderson projected that his home—originally listed for $2.65 million—might have been priced as high as $2.9 million had he faced these higher expenses.
Critics have warned about the impact of the current immigration crackdown on the construction since long before Trump took office. Back in October, Jim Tobin, CEO of the National Association of Home Builders, told NBC News that removing foreign-born workers from the labor force could have significant economic repercussions, explaining that "it would be detrimental to the construction industry and our labor supply and exacerbate our housing affordability problems.
In the same report, Stan Marek, CEO of Texas-based Marek Family of Companies echoed Tobin's comments:
"We need them. They're building our houses—have been for 30 years. Losing the workers would devastate our companies, our industry and our economy"
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