A recent analysis by the Federal Reserve Bank of Dallas highlights how the unprecedented rise in illegal immigration under the Biden administration contributed significantly to increasing housing costs for Americans. The report examines the period from early 2021 through early 2024, noting that the influx of undocumented immigrants added millions to the U.S. population and subsequently drove up demand in the housing market.
The study found that the net addition of illegal immigrants during this period was nearly double the number of legal immigrants, with the foreign-born population reaching a record high of nearly 52 million. Unauthorized immigration alone added roughly 7 million people to the country’s population, a sharp increase compared to previous decades when net illegal immigration was minimal or even negative.
This rapid population growth intensified housing demand, directly influencing prices and rents. The report quantifies this effect, estimating that for every 1% increase in unauthorized immigrant worker flows relative to local employment, house prices rose by 2.2%, while rents increased by 1.4%. This pattern mirrors earlier research on legal immigration’s impact on housing during the 1985-1998 period.
Overall, the report suggests that unauthorized immigrant inflows accounted for about 30% of the house price growth and 20% of the rent increase in affected local markets during the analyzed timeframe. These elevated housing costs disproportionately affect first-time homebuyers and lower-income households, particularly those not receiving public assistance.
Supporting these findings, a Housing and Urban Development (HUD) investigation released last year underscored immigration as a major factor behind rising housing needs and prices. It highlighted that the surge of over six million foreign-born residents in just a few years intensified housing demand enough to significantly push up prices in many markets, in some cases accounting for nearly all of the price growth observed.