For years, everyday Americans watched rent checks and mortgage payments climb while being told by the political and media establishment that immigration had nothing to do with it. Now a new working paper out of the Federal Reserve Bank of Dallas has put hard numbers behind what millions of families already felt in their monthly budgets. The unprecedented wave of illegal immigration that flooded the country during the Biden administration helped drive home prices up by roughly 30 percent and rents up by roughly 20 percent in the average American metro area.
The paper, authored by Federal Reserve economists, combined immigration court records with government administrative data to build the first systematic assessment of how the record surge in unauthorized immigration between 2021 and 2024 reshaped local labor and housing markets. Researchers found that from early 2021 to early 2024, the country experienced what they called an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024, coinciding with tightened border enforcement.
According to the findings, a one percent increase in unauthorized workers relative to a local labor force corresponded with roughly a one percent increase in overall employment in that area.
On its face, Democrats and open-borders advocates will likely seize on that figure to argue immigration boosted the economy. But the same one percent increase in unauthorized workers was also associated with a 2.2 percent rise in home prices and a 1.4 percent increase in rents, and researchers found little evidence that homebuilding expanded fast enough to absorb the new demand.
Putting the numbers together across the full period studied, the economists estimated that unauthorized immigrant worker flows accounted for approximately 30 percent of home price growth and about 20 percent of rent growth in the average metropolitan area between March 2021 and March 2024. The total weighted average increase in home prices and rents over that stretch came in at roughly 22 percent each, meaning illegal immigration was not a minor contributing factor. It was one of the single largest drivers of the affordability crisis that has crushed American families for the past several years.
Researchers described the effect as a housing demand shock hitting markets where supply was already constrained by years of restrictive zoning, high construction costs, and sluggish permitting in blue-run cities and counties. In other words, the Biden administration opened the floodgates at the border at the exact moment the country’s housing supply was least equipped to absorb millions of new residents, and working- and middle-class Americans paid the price at the closing table and on their lease renewals.
This is not a fringe conservative talking point anymore. It is coming from economists inside one of the twelve regional banks of the Federal Reserve System, an institution that has never been accused of catering to the political right. The paper’s authors were careful to note it is a preliminary draft and does not necessarily reflect the official views of the Dallas Fed or the broader Federal Reserve System, but the underlying data and methodology are difficult to dismiss.
President Trump has already seized on the findings, sharing the report and using it to bolster his administration’s argument that the border crisis under his predecessor imposed real and measurable costs on ordinary Americans, not just on federal budgets or border communities. Housing and Urban Development Secretary Scott Turner also weighed in, arguing that the record number of illegal aliens who arrived under Biden helped push prices higher while squeezing available supply, and crediting the current administration’s efforts to bring down costs and expand supply.
For years, the standard media narrative held that immigration, legal or otherwise, was an unambiguous economic positive with no meaningful downside for existing American residents. This paper complicates that narrative considerably. Yes, employment rose. But the benefits of that employment growth were not evenly distributed, and the costs, in the form of higher housing prices, fell disproportionately on renters and first time homebuyers who were already struggling before the surge began.
It is worth remembering the scale of what occurred at the southern border during this period. Encounters with illegal border crossers reached record levels year after year under the Biden administration, with millions of people entering the country outside the legal immigration system. Many of those individuals settled in specific metro areas, often clustering in cities with existing housing shortages, from parts of Texas to New York City to Chicago and Denver, placing acute pressure on local rental markets almost overnight.
Critics of the Biden border policy warned repeatedly throughout 2021, 2022, and 2023 that flooding local housing markets with new demand while doing nothing to expand supply would inevitably drive up costs for existing residents. Those warnings were frequently dismissed by administration officials and sympathetic commentators as fearmongering or thinly veiled xenophobia. This new Federal Reserve research suggests those critics had a legitimate economic point that deserved a serious hearing rather than a dismissal.
The political stakes of this finding are significant heading into the midterms. Housing affordability consistently ranks among the top concerns for voters across the political spectrum, and Republicans have increasingly tied the issue directly to the border crisis of the Biden years. This paper gives the GOP hard, peer-reviewed style evidence to make that case rather than relying solely on anecdote or intuition.
Democrats, for their part, have historically preferred to frame immigration purely through a humanitarian or labor market lens, emphasizing job growth and filled positions in industries like agriculture, construction, and hospitality. What this paper suggests is that those labor market benefits came bundled with a housing cost burden that was rarely acknowledged in that framing, and voters are entitled to weigh both sides of that ledger honestly.
It also raises uncomfortable questions about the sincerity of progressive rhetoric on housing affordability. Many of the same political figures who have spent the past several years decrying a national housing crisis and calling for more affordable units also supported the immigration policies that this research now links to a meaningful share of the price increases those very voters are struggling with.
The Trump administration has moved aggressively since taking office to reverse the immigration policies blamed for the surge, tightening asylum processing, ending catch-and-release practices, and ramping up removals of individuals without legal status. Administration officials argue that stabilizing the immigration system is a necessary precondition for any serious effort to bring housing costs back down to earth for American families.
Whether that approach succeeds in meaningfully lowering prices remains to be seen, since housing markets are shaped by many factors beyond immigration, including interest rates, construction costs, labor shortages in the building trades, and local land use restrictions. But the Fed paper at minimum establishes that immigration policy is not a bystander in the affordability debate. It was an active participant and a significant one.
For families who spent the last several years watching rents rise faster than their paychecks, or who found themselves priced out of homeownership entirely, this research offers a measure of validation. It was not simply low interest rate policy or greedy landlords driving the crisis, as some on the left have insisted.
A significant share of the pain traces directly back to a border policy that allowed millions of people to enter the country with essentially no plan for where they would live or how existing infrastructure would absorb them.
