A new working paper from the Federal Reserve Bank of Dallas finds that the record surge in illegal immigration during the Biden administration significantly contributed to higher home prices and rents in the United States between 2021 and 2024 [1]. The study, which combines immigration court records with government administrative data, analyzes the impact of unauthorized immigration on local labor and housing markets. The authors emphasize that the paper is a preliminary draft circulated for professional comment and does not necessarily reflect the official views of the Federal Reserve Bank of Dallas or the Federal Reserve System [1].
Key findings from the research indicate that a 1% increase in unauthorized workers relative to a local labor force was associated with a roughly 1% increase in overall employment, with no evidence that the immigration surge reduced average wages [1]. However, the same 1% increase in unauthorized workers corresponded to a 2.2% rise in home prices and a 1.4% increase in rents. The study found little evidence that homebuilding expanded sufficiently to meet the added demand, concluding that the influx of unauthorized immigrants acted as a housing demand shock, particularly in markets where supply was already constrained [1].
The economists estimate that unauthorized immigrant worker flows accounted for about 30% of employment growth, roughly 30% of home-price growth, and about 20% of rent growth in the average metropolitan area between March 2021 and March 2024 [1]. The authors stress that these estimates apply to the average metro area studied and do not suggest that immigration was the sole driver of rising housing costs nationwide [1].
The paper describes the period from 2021 through 2024 as an "unprecedented boom" in illegal immigration, citing Congressional Budget Office estimates that net unauthorized immigration added roughly 7 million people to the U.S. population before slowing sharply in mid-2024 [1]. The findings arrive amid ongoing political debate, with Republicans arguing that Biden's border policies strained housing and public resources, while Democrats contend that immigration helped ease labor shortages and supported economic growth [1].
CONCLUSION
The Federal Reserve Bank of Dallas working paper highlights a strong link between the recent surge in illegal immigration and rising housing costs in the U.S., attributing a significant portion of home price and rent increases to this trend. While the study underscores the impact on housing demand, it also notes positive effects on employment and no measurable wage decline. These findings are likely to fuel ongoing political and market debates regarding immigration policy and housing affordability.