The ailing housing market is getting sicker

The U.S. housing market is facing a double squeeze: mortgage rates topping 7% and higher construction costs from tariffs and the Iran war, while labor shortages are now further eroding builder profits. A survey by John Burns Research and Consulting finds that the administration’s immigration enforcement efforts are driving severe shortages across the industry. The report links the issue to intensified ICE arrests that have followed a White House push, including three straight months of record arrests during summer. Builders say even legally authorized workers are staying away, fearing detention or deportation in an ICE sweep at job sites, especially as enforcement reportedly coordinates with immigration courts to dismiss some noncitizen removal cases and move others to expedited removal. Immigrants make up over 26% of the construction workforce, and many trades heavily rely on them. Prior studies estimated the skilled single-family labor shortfall costs about $19 billion per year, and spending on AI data center construction—$37 billion through July versus $46 billion for everything else—has also pulled workers away.