A Federal Reserve Bank of Dallas working paper concluded that the record surge in unauthorized immigration during the Biden administration drove up home prices and rents. The analysis found a direct correlation between the influx of unauthorized immigrants and increased housing costs.
The paper examined 2021 through 2024, combining immigration court records with government administrative data to measure the impact on local labor and housing markets.
Researchers found that a 1 percent increase in unauthorized workers relative to a local labor force corresponded with approximately a 1 percent increase in overall employment and little measurable effect on average wages for native-born workers.
The same 1 percent increase in unauthorized workers, however, was associated with a roughly 2.2 percent rise in home prices and a 1.4 percent rise in rents.
Unauthorized immigrant worker flows accounted for about 30 percent of employment growth in the average metropolitan area between March 2021 and March 2024, the economists estimated. The same flows linked to roughly 30 percent of home-price growth and about 20 percent of rent growth during that period.
Researchers found little evidence that new homebuilding expanded sufficiently to meet the added demand. The paper concluded the influx acted as a housing demand shock in markets where supply was already constrained.
The authors cautioned the study is a preliminary draft circulated for professional comment and the findings do not necessarily reflect the official views of the Federal Reserve Bank of Dallas or the broader Federal Reserve System.
Republicans have argued that former President Joe Biden's border policies strained housing and public resources in communities across the country. Democrats have stated that immigration helped ease labor shortages and supported economic growth. The Congressional Budget Office estimates that net unauthorized immigration added approximately 7 million people to the U.S. population before slowing sharply in mid-2024.
