Did the influx of immigrants help drive up housing prices?

The simple answer is yes, but not by the 30% Voldemort claims. The WSJ estimates the number is slightly North of 6%.

The Latest Housing Scapegoats

Politicians are misusing a Fed study on migrants and home prices.

By The Editorial Board, WSJ

July 8, 2026 5:57 pm ET

President Trump has blamed Wall Street investors for high housing prices. And now he’s blaming illegal immigrants, claiming to find evidence in a Dallas Federal Reserve paper. Not so fast.

Promoting the paper on social media, Mr. Trump this week claimed that the “Biden illegal immigrant wave drove up home prices 30%.” Vice President JD Vance said the study shows that “Stopping the flood of illegal migrants into this country will bring down home prices and make housing affordable again for young Americans who are trying to start a family.” Did they read the study?

We did, and its findings are far from conclusive. The authors used administrative data to determine where unauthorized immigrants (including those on parole) settled during the Biden border surge. It found that an inflow of unauthorized workers equal to 1% of a local area’s workforce was associated with a 2.2% increase in local home prices and 1.4% in rents.

They extrapolated that unauthorized immigration accounted for roughly 30% of home-price, and 20% of rent, increases between early 2021 and early 2024. This equates to an increase of 6.6% in home prices and 4.3% in rents during that period—not 30%. Some caveats are also in order.

The paper doesn’t directly control for pandemic-era domestic migration or variables that make certain metro areas attractive to both illegal immigrants and domestic migrants. Masses of Californians and Northeasterners also flooded into Sun Belt metros at the same time as migrants moved. Domestic migration may have been a bigger driver of local home prices.

It’s also strange that undocumented migrants would have a bigger effect on home prices than on rents since the vast majority of illegal immigrants are renters. Few illegal migrants would qualify for mortgages because of their low incomes, small savings and thin credit records.

Some of the study’s other findings also run counter to the restrictionist narrative that immigrants hurt opportunities for American workers. More illegal immigration didn’t have an adverse effect on local wages or employment. On the contrary. Employment increased commensurately with immigration, so undocumented workers weren’t taking jobs from Americans.

The study also found that government transfer payments fell significantly more in areas with greater illegal immigration. That means taxpayers saved money. This could be because areas with more illegal migration enjoyed faster economic growth. Regardless, the study suggests that illegal immigrants for the most part didn’t become wards of the welfare state.

The primary culprits for today’s high housing prices are inflation and the Federal Reserve’s historically low interest rates in the pandemic. The Biden team also eased mortgage underwriting standards, which raised demand. Higher interest rates have now created a lock-in effect for owners. Still, prices have begun to fall in areas with growing supply.

Other studies have found that increased immigration helps keep down housing prices over time by boosting the supply of construction labor. As more Americans age out of the workforce, foreign workers are becoming all the more critical. Deporting workers and limiting “Wall Street” investment in housing will make homes less affordable for young families.