A new Federal Reserve A working paper found that the record increase in illegal immigration under the Biden administration triggered a rise in housing prices and rents.
The results arrive as immigration remains a polarizing political issue. Republicans say former President Joe Biden’s border policies strained housing and public resources, while Democrats say immigration helped ease labor shortages and support economic growth.
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A “for sale” sign is posted in front of a single-family home for sale on August 22, 2025, in Pasadena, California. (Mario Tama/Getty Images)
THE paperpublished by the Federal Reserve Bank of Dallas, combines immigration court records with government administrative data to measure the impact of the unprecedented wave of illegal immigration between 2021 and 2024 on local labor and housing markets.
The authors caution that the study is a draft released for professional comment and does not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.
Researchers found that the influx of illegal immigrants boosted employment with little measurable effect on wages, but significantly increased demand for housing.
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President Joe Biden walks along part of the U.S.-Mexico border in El Paso, Texas, January 8, 2023. (AP Newsroom)
A 1% increase in the number of illegal workers relative to the local labor force corresponded to about a 1% increase in overall employment, with no evidence that the immigration surge reduced average wages. However, the same 1% increase was associated with around a 2.2% rise in house prices and a 1.4% increase in rents. The researchers found little evidence that housing construction expanded enough to meet the additional demand, concluding that this influx acted as a housing demand shock in markets where supply was already limited.
Economists estimate that flows of illegal immigrant workers accounted for about 30% of employment growth, about 30% of house price growth and about 20% of rent growth in the average metropolitan area between March 2021 and March 2024.
They emphasize that these estimates apply to the average metropolitan area studied and do not suggest that immigration is the sole driver of rising housing costs nationally.
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Contractors raise a frame wall in Folsom, California, March 6, 2025. (David Paul Morris/Bloomberg via Getty Images)
The document describes the period 2021 to 2024 as an “unprecedented boom” in illegal immigration.
Citing Congressional Budget Office estimates, the authors say that net unauthorized immigration added about 7 million people to the U.S. population before slowing sharply in mid-2024.