(José Niño, Headline USA) On Sunday, Just the News reported on a striking new Federal Reserve Bank of Dallas working paper that ties the Biden era surge in illegal immigration to a sharp jump in housing costs. The outlet summarized findings that the migrant wave lifted employment while driving roughly 30% of home price increases and 20% of rent increases from 2021 through 2024.
As Just the News noted, economists Daniel Wilson and Xiaoqing Zhou merged immigration court records with government administrative data to build what they call the first ever measure of how about 7 million illegal immigrants reshaped local labor and housing markets. The authors wrote that “from early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode.”
The numbers run steep. Across the study window, the full paper reports that “the total weighted-mean increases in house prices and rents over this period were 22.4% and 22.6%, respectively. Putting these together, for the average MSA, UIWF can explain approximately 30% of the total increase in house prices and 20% of the total increase in rents.”
The researchers also found that an inflow of illegal workers equal to 1% of local employment pushed house prices up 2.2% and rents up 1.4%. They describe the mechanism plainly, writing that the influx “acted as a housing demand shock in the face of short-run inelastic supply, boosting rents and prices.” In other words, demand surged while builders stayed on the sidelines.
Just the News stressed that the study found little sign that home construction expanded to absorb the arrivals, deepening the squeeze where supply was already tight. Employment, meanwhile, rose almost one for one with the worker inflows, with little measurable hit to local wages.
The paper also carries a caveat Just the News passed along. The authors call it a preliminary draft circulated for professional comment, one that does not necessarily reflect the views of the Dallas Fed or the broader Federal Reserve System.
José Niño is the deputy editor of Headline USA. Follow him at x.com/JoseAlNino
