America’s homebuilders entered the fall with 256,000 newly constructed homes still under construction for sale and another 114,000 permitted or otherwise classified as not yet started.
Together, those 370,000 homes represent an enormous amount of work builders still have to complete, along with intensifying business risk tied to their ability to do so.
The figures come from the Census Bureau’s August New Home Sales report, as highlighted by housing economist Bill McBride of Calculated Risk. They take on added urgency as builders enter the final months of 2026, racing to move homes through the remaining stages of construction, complete deliveries before winter and year-end, and convert invested capital back into cash.
These are homes for sale, not homes already under contract. But that distinction should not be mistaken for a lack of financial exposure. By the time a builder has secured land, developed lots, obtained permits, and committed to a speculative home, the builder has already invested capital and assumed risk. For the 256,000 homes under construction, those commitments are substantially further along.
Many of those homes are approaching the point where a reliable sequence of finishing trades determines whether a project closes on schedule or slips into another month, quarter, or year. Drywall installers, painters, flooring crews, finish carpenters, and other subcontractors must arrive in the right order, with little room for delays.
That’s where a serious problem has taken hold in the homebuilding landscape.
Just as homebuilders need to complete work already underway, the skilled trade crews required to finish those homes are becoming harder to secure. Immigration enforcement is adding another layer of disruption to an already constrained workforce, threatening construction schedules, increasing carrying costs and putting additional pressure on businesses whose margins and cash flows are already stretched.
It would be one thing if immigration enforcement were merely reducing the availability of construction workers. What’s now becoming clear is that an industry already struggling to sell homes may be unable to reliably finish the homes it has invested so much upfront capital in.
A labor shortage in a slowing housing market
Normally, slower homebuilding activity would ease competition for construction workers. With fewer new starts, builders should have more flexibility to secure the crews needed to complete projects already underway.
But residential construction does not operate in isolation. Skilled workers and subcontractors can pursue opportunities in commercial construction, infrastructure, and the rapidly expanding data-center sector, where demand for certain trades remains strong. As a result, a slowdown in new-home production does not necessarily translate into greater labor availability for homebuilders.
Immigration enforcement is now ratcheting up that squeeze.
The combination is particularly dangerous at this point in the construction and business cycle. Builders are entering the final weeks of the year with significant capital tied up in homes at various stages of completion. Many are trying to complete projects before winter weather complicates schedules and before year-end financial and delivery targets come due.
A shortage of framing crews can delay a project early in its timeline. A shortage of drywall installers, painters, flooring specialists, or finish carpenters can prevent a nearly completed home from being delivered, even after most of its construction costs have already been incurred.
A home that is 90% complete is not 90% of a closing. Until the remaining work is finished, inspections are passed and a buyer can take possession, the builder may be unable to realize the expected sales proceeds. Meanwhile, construction financing, overhead, taxes, insurance and other carrying costs continue.
For speculative homes without buyers, delays extend the period during which builders must finance inventory in an already difficult sales environment. For homes under contract, delays can jeopardize closing dates, buyer commitments, and expected loan repayments.
The screws turn even tighter for privately held regional and local builders, whose access to capital and financial reserves may be more limited than that of their larger publicly traded competitors.
This is why the industry’s labor shortage cannot be viewed merely as another construction cost pressure. It has become a potential constraint on builders’ ability to convert work in progress into completed homes, to repay financing, and to sustain their businesses.
The greater the competition for skilled workers from other sectors, the less capacity homebuilders have to absorb additional disruptions caused by immigration enforcement.
And the closer a home gets to completion, the more meaningful even a relatively short schedule hiccup can become.
The workers who make homebuilding possible
New research from Harvard University’s Joint Center for Housing Studies makes clear why immigration policy directly affects the industry’s ability to build.
In a research brief published on October 8, senior research analyst Riordan Frost found that immigrants accounted for 35% of the nation’s construction trades workforce in 2024, even though foreign-born workers made up only 18% of the overall U.S. labor force.
The concentration is substantially higher in occupations central to residential construction.
Foreign-born workers accounted for 57% of drywall and ceiling tile installers, 53% of roofers, 53% of painters and 51% of flooring installers. They represented 44% of construction laborers and 35% of carpenters.
Perhaps the study’s key finding concerns how the workforce has changed over time. Between 2013 and 2024, foreign-born workers accounted for all net growth in the construction trades workforce. The number of native-born trades workers remained below its pre-Great Recession level.
Among construction laborers, the workforce grew by 236,000 during that period because an increase of 273,000 foreign-born workers more than offset a decline of 37,000 among native-born workers.
These findings do not mean that Americans cannot or should not be recruited into construction careers. They mean that the industry’s current workforce has developed around substantial immigrant participation, and replacing that capacity will require far more than a change in recruiting language.
Attraction to construction careers has shown signs of life as AI disruption clouds livelihoods in other job sectors. But it doesn’t happen with the flip of a switch.
Nor does the term immigrant worker mean undocumented worker. Harvard’s figures include foreign-born workers regardless of whether they are naturalized citizens, lawful permanent residents, temporary visa holders or undocumented immigrants.
On the ground and among the trades, that’s important both legally and analytically.
The available data do not precisely establish how many undocumented workers are employed on residential jobsites. Workers hired through layers of subcontractors, informal arrangements, and day-labor networks can be particularly difficult to count. Whether official surveys capture every worker is doubtful, but turning that uncertainty into an unsupported estimate is risky.
The evidence does establish that America’s capacity to build homes depends heavily on people who came here from other countries.
When a missing trade crew becomes a financing problem
The stakes extend beyond the added expense of carrying a home through an unexpected construction delay.
Homebuilding is a capital-intensive business whose financing arrangements often depend on construction progress. Under many builders’ credit facilities and project loans, access to successive draws of capital is tied to reaching specified stages of construction, meeting inspection requirements, and documenting that work has been completed in accordance with the lender’s terms.
That makes the availability of the 25 or 30 separate subcontractors and trade crews involved in building a home essential not only for construction scheduling but also for the builder’s ability to finance the work.
If framing cannot be completed because a crew fails to appear, the next phase of construction may be delayed. If drywall, painting, flooring, or finish carpentry cannot proceed, a nearly completed home may not reach the milestone required for another loan advance or a scheduled closing.
The domino effects can cascade. The builder must continue meeting payroll, paying subcontractors and suppliers, and covering land, construction, and overhead costs. Yet the financing expected to support the next stage of work may be delayed until the preceding stage is completed and approved.
Depending on the loan agreement, repeated delays may also put construction deadlines, borrowing availability or other financing covenants at risk. A missed milestone does not automatically constitute a loan default, but it can create liquidity pressure that becomes increasingly difficult to manage.
For smaller and midsized private homebuilders, whose credit relationships and working capital are often closely tied to specific projects and construction schedules, the consequences can threaten the viability of an otherwise sound business.
This is why growing uncertainty over construction labor availability is evolving fast into a crisis. Immigration enforcement disruptions are unfolding at a moment when builders are already grappling with slower sales, elevated inventory, compressed margins, and heightened competition for skilled workers from other construction sectors.
“There are no clauses in builders’ finance contracts that specify an allowance for missing construction performance deadlines due to a lack of construction workers,” Miles Conway, CEO and Executive VP of the New Mexico Home Builders Association, tells HousingWire TBD. “This issue really puts our businesses at financial risk.
Conway noted that many job sites in Santa Fe and other markets in New Mexico have gone idle due to recent “ICE incidents,” impacting both undocumented and legal immigrant frontline workers.
A homebuilder cannot simply skip a missing trade and move on. Construction proceeds through an interdependent sequence of work, inspections, approvals and financing commitments. When that sequence breaks down, risk trips forward from the jobsite to the balance sheet, and potentially to the builder’s relationship with its lenders.
What begins as a worker shortage can become a cash shortage. And what begins as a delayed home can become an existential financial moment for a homebuilding firm.
The disruption is spreading, but not evenly
The dependence varies sharply by geography. An April NAHB analysis found that foreign-born workers represented 42% of California’s construction workforce, 41% of Florida’s and 39% of Texas’s. In several northern states, the share was below 5%.
Those differences help explain why builders’ experiences with stepped-up enforcement have varied so widely.
In our previous reporting, a regional homebuilding CEO described markets where the number of available construction crews had declined dramatically. One builder he knew had gone from five framing crews to just two.
That account drew strong reactions, including from people who questioned whether the industry’s need for labor should carry any weight while immigration laws are being enforced.
It also prompted responses from builders who had previously seen little effect in their own markets.
Clint Mitchell, CEO of Indianapolis-based Estridge Homes, wrote that for the past year or two he had answered questions about immigration policy’s impact on local construction labor by saying it was not affecting his market.
“That’s no longer the case,” Mitchell wrote.
He described crews arriving short-handed and construction coming to a standstill with increasing frequency, including on his company’s own projects. He said some other builders appeared to be facing even greater disruption.
This suggests that a problem once concentrated in specific high-immigration construction markets may be reaching builders who had regarded it as someone else’s concern.
Ted Leighty, CEO of the Colorado Association of Home Builders and Home Builders Association of Metro Denver, raised another point: The workers staying away are not necessarily undocumented.
Leighty said that legal and documented workers also fear being caught up in enforcement operations and may avoid job sites as a result. Their lost wages, he observed, can reduce tax revenue and household spending while creating additional economic pressure.
The distinction between workers removed through enforcement and those absent because they fear enforcement is critical. Both can affect construction schedules, but they call for different policy responses.
Both leave a builder with the same immediate problem: A home cannot progress to its next stage of construction.
An industry divided over the remedy
The response to our earlier article exposed a fault line that cannot be dismissed as political theater.
One reader objected that building homes should not take priority over enforcing immigration law. That view deserves accurate representation. Immigration laws are laws, and a country has a legitimate interest in determining who may enter, remain, and work within its borders.
Other readers agreed that borders should be enforced but argued that current tactics are inflicting economic damage far beyond the people targeted.
Justin Leo, an executive in exterior contracting, framed the problem as a shrinking jobsite labor supply and the resulting pressure on costs and housing production.
Steve Griggs, a longtime homebuilding and development professional, suggested that the industry must also accelerate innovation in how homes are built, including methods that reduce reliance on traditional onsite labor.
Those perspectives don’t necessarily cancel each other out.
The country can enforce immigration laws while recognizing that the manner and pace of enforcement carry economic consequences. The industry can invest in automation, factory production, workforce training, and improved construction processes while acknowledging that none of those measures will replace experienced crews on jobsites next week.
The immediate challenge is not to settle every immigration debate. It is to prevent an already strained homebuilding production system from suffering avoidable damage while the country works toward more durable answers.
What is NAHB prepared to do next?
The National Association of Home Builders has not been silent.
In a September 25 statement, the association acknowledged that enforcement actions were discouraging legally authorized workers from reporting to jobsites, delaying construction and raising costs.
Elizabeth Thompson, assistant vice president of media relations at the NAHB, confirmed to HousingWire TBD that NAHB is hearing from more builders about stepped-up immigration enforcement, ICE raids, and disruptions to construction job sites.
Thompson said the association has also “stepped up” its efforts to engage with Immigration and Customs Enforcement, the Department of Homeland Security, the administration and Congress as builders report mounting concerns about their ability to maintain dependable construction crews.
Those efforts build on NAHB’s established policy positions, including its advocacy for construction-specific guest-worker visa programs and other measures intended to expand lawful access to the skilled labor the industry needs.
The association has previously warned that immigration enforcement can disrupt construction even when workers are legally authorized to work, as fear of enforcement actions can keep workers away from job sites. It has also supported legislative approaches intended to address the industry’s long-standing workforce shortages.
Its policy agenda includes support for the DIGNITY Act, preservation of the H-2B guest-worker program and expanded domestic workforce training.
These are meaningful steps, and the association deserves credit for taking them.
The latest reports from builders add urgency to those efforts. NAHB’s September survey found that shortages of both directly employed workers and subcontractors have become more widespread, even as new-home construction activity has slowed. The question now is whether worsening labor shortages and mounting jobsite disruption demand a more forceful, immediate response.
NAHB Chief Economist Robert Dietz, in a comment provided to HousingWire TBD, described the concerns he has heard while visiting builder associations across the country:
“In my last two months of travel speaking to builder associations across the country, I have heard more and more concerns about immigration enforcement and its impact on the labor supply, and impacts on no-show activity, due to what appears to be a step up in enforcement activity. This is particularly true in markets like Florida and Texas.”
The challenge now extends beyond the longer-term need to develop a larger domestic construction workforce or establish more workable immigration and guest-worker policies. Builders also face an immediate need to keep existing projects moving through construction milestones, lender inspections, financing draws and scheduled completions.
For many privately held builders, a prolonged interruption in the availability of essential trade crews can create financial consequences well before a home reaches its scheduled delivery date.
NAHB’s intensified engagement with federal officials therefore comes at a critical juncture. The industry’s immediate concern is preserving sufficient reliable construction capacity to finish homes already in the production pipeline while policymakers consider longer-term solutions to the workforce shortage.
Whether those discussions lead to changes that reduce jobsite disruptions remains an open question. For builders with capital committed, construction schedules under pressure and year-end delivery targets approaching, the timing of any relief matters almost as much as its substance.
The homes still have to be built
An additional irony marks the current predicament. The nation’s inventory of newly built homes remains elevated. McBride’s analysis of the August Census report put months’ supply at 8.5, well above the four-to-six-month range generally associated with a balanced new-home market.
Completed homes for sale totaled 113,000, more than three times the February 2022 low. Builders already carry substantial finished inventory, while buyers remain constrained by affordability and financing costs.
Yet 256,000 more homes were still under construction, with another 114,000 not started.
For builders, that unfinished work is both an obligation and a source of risk. For prospective buyers, it is housing that has not yet become available for occupancy. For the nation, it is productive capacity that cannot be taken for granted.
A builder can adjust prices, slow new starts, redesign products, and negotiate with suppliers. A builder cannot complete a home without the people who do the work.
That is why this issue belongs at the center of the housing affordability debate, rather than on its political margins.
There is room for disagreement about immigration law, border enforcement, work authorization and the long-term composition of the American construction workforce.
There should be far less disagreement about the need to understand and limit avoidable harm to businesses, workers and families while those questions are addressed.
America needs more attainable housing, both for sale and for rent. It needs financially viable builders, dependable trade partners and a workforce capable of turning land, capital and plans into places people can live.
People do not buy units. They buy homes.
And the country cannot afford to make the people who build those homes disappear from the equation.
