Anew Federal Reserve Bank of Dallas working paper estimates the record surge in illegal immigration during the Biden administration boosted employment while causing 30% of home price increases and 20% of rent increases.
The paper combined immigration court records with government administrative data to create the first ever calculation of how a wave of 7 million illegal immigrants from 2021 through 2024 affected local labor and housing markets.
“From early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode,” the working paper said.
“The total weighted-mean increases in house prices and rents over this period were 22.4% and 22.6%, respectively. Putting these together, for the average MSA, UIWF can explain approximately 30% of the total increase in house prices and 20% of the total increase in rents,” it added.
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The researchers said they found little evidence that homebuilding expanded enough to meet the added demand, essentially creating a demand shock in markets where supply was already constrained.