By Another thing we were constantly told by the media that wasn’t happening despite everyone seeing it with their own eyes has been proven. A new working paper from the Federal Reserve Bank of Dallas found that the Biden-era surge in illegal immigration played a significant role in driving up housing costs across U.S. metro areas, accounting for roughly 30 percent of home-price growth and 20 percent of rent growth in the average market studied.
The paper examined immigration court records and government administrative data to measure how the sharp increase in unauthorized immigration between 2021 and 2024 affected local labor markets and housing. The authors described the period as an “unprecedented boom” in illegal immigration.
The findings come as immigration remains one of the most divisive issues in national politics. Republicans have long argued that the Biden administration’s border policies overwhelmed communities, increased pressure on housing supplies, and strained public services. Democrats have countered that higher immigration helped fill labor shortages and supported economic growth.
According to the Dallas Fed economists, the influx of unauthorized workers increased employment with little evidence of downward pressure on average wages. But the surge also created a major housing demand shock in areas where construction did not keep pace.
The study found that a 1 percent increase in unauthorized workers relative to a local labor force was associated with about a 1 percent increase in total employment. That same increase was linked to a roughly 2.2 percent rise in home prices and a 1.4 percent increase in rents.
Researchers found little evidence that residential construction expanded enough to absorb the added population pressure, meaning supply-constrained housing markets were hit especially hard.
From March 2021 to March 2024, the paper attributed unauthorized immigrant worker flows to about 30 percent of employment growth, roughly 30 percent of home-price growth, and about 20 percent of rent growth in the average metropolitan area studied.
The authors noted that those figures represent the estimated contribution of the immigration surge to observed changes in the typical metro area examined. They do not mean immigration was the only factor behind rising housing costs nationwide.
The paper also cited Congressional Budget Office estimates showing that net unauthorized immigration added roughly 7 million people to the U.S. population before slowing sharply in mid-2024.
The Dallas Fed working paper remains a preliminary draft circulated for professional comment. The authors cautioned that its findings do not necessarily reflect the official views of the Federal Reserve Bank of Dallas or the Federal Reserve System.
Still, the analysis offers one of the clearest attempts so far to measure the economic trade-offs of the illegal immigration surge: more workers and higher employment, but also sharply increased housing pressure in communities already struggling with limited supply.
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