A working paper from the Federal Reserve Bank of Dallas indicates that the surge in unauthorized immigration from 2021 to 2024 led to increased housing demand, driving up local home prices and rent rates. The study, which compiled immigration court records and government administrative data, is among the first to comprehensively measure the impact of this migration wave on local economies and labor markets.
Researchers found that a 1% increase in unauthorized immigrant worker inflows corresponded with a roughly 2.2% rise in local home prices and a 1.4% increase in rents. The paper notes that this occurred while the influx of workers boosted local employment by approximately one-for-one, with little measurable effect on wages. The authors caution that the findings are from a preliminary draft and do not necessarily represent the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.
The study estimates that between March 2021 and March 2024, unauthorized immigrant worker flows accounted for about 30% of employment growth in the average local labor market. Over the same period, these inflows are estimated to have contributed to roughly 30% of home-price growth and about 20% of rent growth in the average metropolitan area.
The findings suggest that the housing demand shock from immigration outpaced the growth of housing supply in many areas, particularly where supply was already constrained. The paper describes the period between 2021 and 2024 as an "unprecedented boom" in illegal immigration, with net unauthorized immigration adding approximately 7 million people to the U.S. population before slowing in mid-2024.
The study also examined government spending, finding that areas with larger increases in unauthorized immigrant workers experienced declines in government transfer payments. Researchers suggested this could reflect stronger employment and reduced reliance on safety-net programs among working-age immigrants, a finding that differs from some previous survey-based research.
Immigration has been a central political issue, with Republicans frequently citing strained public resources and housing affordability as consequences of the Biden administration's border policies. Democrats have often pointed to immigration as a factor in easing labor shortages and supporting economic growth.