The influx of illegal immigrants into the U.S. during the Biden administration acted as a “demand shock” for housing markets, increasing housing and rent prices, a working paper by the Federal Reserve Bank of Dallas said.
The paper, which noted that 7 million illegal immigrants were added to the U.S. population between 2021 and 2024, was compiled using immigration court records and administrative data.
The authors found that the influx of illegal immigrants also increased employment one-for-one, but did not result in declining local wages.
“At the same time, these inflows raised local house prices and rents, with little evidence of increases in housing supply,” the paper said. “Thus, while the influx of these immigrant workers acted as a positive supply shock to local labor markets, it acted simultaneously as a demand shock to local housing markets, boosting rents given relatively inelastic short-run housing supply.”
The authors found that every 1% increase in illegal immigrant workers on a locality’s employment results in a 2.2% increase in housing prices and a 1.4% increase in rent.
It goes on to estimate that unauthorized immigrant worker flows “can explain about 30% of the total growth in house prices and 20% of total growth in rents over the boom period for the average local market.”
The Federal Reserve Bank of Dallas clarified the 65-page working paper is a preliminary draft “circulated for professional comment” and doesn’t necessarily reflect the bank’s view.
“Overall, our findings provide new evidence on the local labor-market, housing-market and fiscal effects of large-scale unauthorized immigration shocks to the U.S. economy, which are unprecedented in the modern era, and offer a data-driven approach for evaluating their economic implications,” the paper concluded.
The Trump administration has pointed to the report to support its ongoing deportation efforts.
56% of Americans support the mass deportation of illegal aliens. ⬇️
We will continue to deliver on President Trump’s mandate to DETAIN AND DEPORT illegal aliens. We are making America SAFE again.
If you are in our country illegally, leave NOW or face immediate removal. https://t.co/E3BLIkq2Dy
— Secretary Markwayne Mullin (@SecMullinDHS) July 6, 2026
“56% of Americans support the mass deportation of illegal aliens,” DHS Secretary Markwayne Mullin said on social media. “We will continue to deliver on President Trump’s mandate to DETAIN AND DEPORT illegal aliens. We are making America SAFE again.”
“If you are in our country illegally, leave NOW or face immediate removal,” he added.
