A recent working paper from Federal Reserve economists indicates that the significant increase in unauthorized immigration during the Biden administration has contributed to higher housing costs across the United States. The study, published by the Federal Reserve Bank of Dallas, found that the influx of immigrants led to a notable rise in both home prices and rental rates.
Researchers combined immigration court records with government administrative data to analyze the impact of the unprecedented wave of illegal immigration between 2021 and 2024. Their findings suggest that while this immigration surge boosted employment, it had a more pronounced effect on the housing market.
Specifically, the paper estimates that a 1% increase in unauthorized workers relative to a local labor force was associated with approximately a 2.2% increase in home prices and a 1.4% increase in rents. The study noted that homebuilding did not expand sufficiently to meet the added demand, leading to a housing demand shock in markets that already faced supply constraints.
The economists also estimated that unauthorized immigrant workers accounted for about 30% of employment growth, roughly 30% of home-price growth, and about 20% of rent growth in the average metropolitan area studied between March 2021 and March 2024. The authors cautioned that these figures are preliminary and do not suggest that immigration was the sole cause of rising housing costs nationwide.
The paper refers to the period from 2021 through 2024 as an “unprecedented boom” in illegal immigration, citing Congressional Budget Office estimates that net unauthorized immigration added approximately 7 million people to the U.S. population before a slowdown in mid-2024.
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