Illegal Immigration Drove US Home Prices 6.6% Higher

A working paper from the Federal Reserve Bank of Dallas, authored by economists Daniel J. Wilson and Xiaoqing Zhou, indicates that a significant increase in unauthorized immigration between 2021 and 2024 contributed to a 6.6% rise in home prices and a 4.3% increase in rents across U.S. metropolitan areas. The paper, a 65-page draft, posits that an influx of unauthorized immigrants equal to 1% of a local area's workforce led to a 2.2% increase in home prices and a 1.4% increase in rents. During the study period, overall house prices increased by 22.4% and rents by 22.6%, with illegal immigration accounting for approximately 30% of the total home price growth and 20% of the total rent growth.

Former President Donald Trump cited the preliminary findings on his Truth Social platform, stating the paper suggested Biden's "illegal immigrant wave drove up home prices 30%." However, the economists' actual findings indicate that unauthorized immigration accounted for 30% of the total increase in home prices, not that prices rose by 30% due to this factor. The study attributes the housing cost increases to a "housing demand shock in the face of short-run inelastic supply," driven by an inflow of an estimated 7 million undocumented immigrants into the U.S.

Beyond housing costs, the research suggests that immigrants also boosted local employment at a near one-to-one ratio with their numbers, without causing substantial declines in wages. The working paper includes a standard disclaimer stating that it is a preliminary draft and that the views expressed are solely those of the authors and do not necessarily represent the opinions of the Federal Reserve Bank of Dallas. The findings have prompted discussions regarding the economic impacts of immigration on housing markets.