By Paul Domeneche
Before diving into this article, I want to make it clear that I am A-political—this is simply my perspective on the policies set to take effect in the near future. As things evolve, so will the landscape of real estate. Enjoy the read, and I appreciate your support of my contribution to this publication.
How Will the New Immigration Policy Affect Real Estate?
One word: Labor. In states like Texas, a significant percentage of construction labor comes from immigrants who are not U.S. citizens. If this workforce is removed, new home construction will slow down, and labor costs will rise.
Is this good or bad?
For sellers of existing homes, this could initially be a positive, as reduced new construction may increase demand and drive up home prices.
For buyers, it’s a different story—higher home prices and limited inventory could make affordability even more challenging, especially if interest rates remain high.
For builders, higher labor costs will make new construction projects more expensive, potentially leading to delays, reduced supply, and further price increases.
If mortgage rates stay elevated, affordability will remain a concern, and the market could slow more abruptly than the gradual price declines and extended days on market we’re currently seeing.
Tariffs: The Cost of Doing Business
Tariffs on imported goods will increase prices across multiple industries, including construction. Building materials will become more expensive—at least temporarily—driving up the cost of new homes.
But here’s the real question: Are we going to focus on short-term price hikes, or will we seize the opportunity to rebuild domestic manufacturing?
This is where I see the new Gold Rush. Instead of complaining about the cost of goods, Americans have the chance to innovate, create and manufacture right here in the U.S., making foreign products less competitive. That’s the conversation we need to be having.
What Does This Mean for Real Estate?
With both labor and material costs rising, homebuilders will struggle, while owners of existing homes might benefit—at least at first. But by 2026, if we fail to boost domestic production and interest rates remain high, the real estate market could face significant challenges.
Forget the outdated mantra of “date the rate, marry the house.” The real question is:
Can you afford the cost of homeownership today, regardless of where interest rates go? If rates drop, great—you refinance and save. But never bank on a future rate cut to justify a purchase.
Final Thoughts
We’re entering a pivotal moment in the real estate market. Immigration policies may squeeze labor supply, tariffs could drive up costs and uncertainty looms. But history shows that periods of disruption breed opportunity.
Yes, there will be some short-term pain. But for those willing to roll up their sleeves and fill in the gaps, this could be a defining moment. After the storm settles, what follows is usually strength.
So, let’s stop waiting and start building. 2025 will be strong. Beyond that? The future is what we make it.
Be Kind. Remain Savage. Change Lives.
— Pauly
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