Fed Analysis: Illegal Immigration Surge Under Biden Jacked Up Home and Rental Prices by Double Digits

A working paper (see below) released by economists at the Federal Reserve Bank of Dallas finds that the unprecedented (and abetted) wave of illegal immigration during the Biden administration accounted for roughly 30% of home price growth and 20% of rent increases in the average U.S. metropolitan statistical area between early 2021 and early 2024. 

The paper, titled “The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata” by Daniel J. Wilson and Xiaoqing Zhou (March 23, 2026), estimates that net unauthorized immigration added approximately 7 million people to the U.S. population during this period—roughly 1.75 million per year—nearly double the pace of legal immigration. (To note, there are also reports of 10 to 12 million illegal immigrants trafficked into the United States by NGO’s and the Biden Administration during that period).

Researchers constructed measures of unauthorized immigrant worker flows (UIWF) using immigration court records, parole data, and other administrative sources. They found that these flows acted primarily as a housing demand shock in markets with inelastic short-run supply. For every 1%  increase in UIWF relative to initial local employment, house prices rose by about 2.2% and rents increased by 1.4%. 

Overall, weighted-mean house prices across studied areas climbed 22.4 percent and rents rose 22.6 percent during the boom period. The immigration-driven component explained approximately 30 percent of the total house price increase and 20 percent of the rent increase in the average market. 

Notably, there was no significant corresponding expansion in housing supply, as measured by new building permits. 

Chronic underbuilding due to restrictive zoning, environmental regulations, and local opposition has long limited supply, particularly in high-cost states like California. When millions of additional residents arrive in a short period without matching construction, the result is intensified competition for existing units and upward pressure on prices and rents.

This analysis aligns closely with reporting I have done previously on the drivers of America’s housing pressures. As I noted in coverage of tightening border security and immigration enforcement, rents have declined in periods of reduced illegal inflows—underscoring that the so-called “housing crisis” has been substantially fueled by surging immigration, both legal and illegal, which has rapidly increased population and housing demand in supply-constrained regions. 

According to reports, Nevada has seen an increase of 562% in the state’s illegal immigrant population since 2021. (emphasis added). During the four years of the Biden administration, Las Vegas rents skyrocketed, but since January of this year, they have declined by an average of three percent.

“The research literature has generally found that increases in immigration raise state and local governments’ spending — particularly on education, health care, and housing — more than their revenues,” according to a report by Numbers USA. According to FAIR US, in 2023 illegal immigration cost Nevada taxpayers an estimated $2 billion, or nearly $2,000 per Nevada household annually.

“Our greatest blunder, or our biggest misunderstanding, is not being able to understand exponential growth because it can come on so suddenly and it hits you like a ton of bricks. For example, if you’re growing by one percent a year, that’s a doubling time of 70 years. If you’re growing by two percent a year, that’s a doubling time of 35 years, and so on. So anything that grows exponentially is unsustainable in nature. America’s own working class is disadvantaged by this and disproportionately impacting Black and Latino citizens. So, they are the ones who are hurt the most. The groups who claim that they care about these working class people? It’s a crock.” said Leon Kolankiewicz, Scientific Director for NumbersUSA, in our 2024 interview.

On that note, what does a 562 percent increase in Nevada’s illegal immigrant population in a short four years do to Nevada’s housing affordability and availability? Politicians in Nevada and elsewhere will simply say that their respective state has a housing crisis.

The Dallas Fed paper provides one of the first systematic, data-driven assessments of the post-2021 illegal immigration boom’s localized effects on both labor and housing markets. It comes amid ongoing national debate over border policies, enforcement priorities, and the interplay between population growth and housing affordability.

As promised earlier tonight, here is Michelle Bowman of the Federal Reserve Board of Governors:

"Given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents."https://t.co/dfO0wFmyPs pic.twitter.com/KfDjPaZC7G

— JD Vance (@JDVance) October 2, 2024

I have often said we don’t have a housing crisis, we have an immigration crisis–both legal and illegal. Now that the Trump administration is enforcing federal law at the border and within “sanctuary” jurisdictions, the overall housing and rental market is easing due to a “surge in inventory”–which, according to numerous reports, is likely tied to over two million people self-deporting or deported by the Trump administration.