Dallas Fed Report Links Unauthorized Immigration to Housing Price Increases

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Unauthorised immigration has seen a sharp rise between 2021 and 2024, resulting in increased housing demand, according to a report by the A report by the federal reserve bank of Dallas, United States.

The report, which is also being promoted by US President Donald Trump, says that this increased demand has resulted in higher home prices and rents in its metropolitan areas.

According to The Washington Post, the study gained popularity after Trump cited its findings in support of his argument that illegal immigration, during the final years of former US President Joe Biden's administration, fuelled the rise in housing costs.

The research, published in March, examines the economic effects of an increase in unauthorised immigration.

To estimate the impact of the migration surge, the researchers combined immigration court records with administrative government data, allowing them to track changes in local labour markets and housing demand across metropolitan areas between March 2021 and March 2024.

The paper concludes that an increase in the unauthorised immigrant population, equivalent to one per cent of a local workforce, was associated with around a one per cent increase in total employment.

At the same time, the increased population translated into stronger demand for housing.

According to the study, an increase in the local workforce was associated with a 2.2 per cent rise in house prices and a 1.4 per cent increase in rents.

As per the authors, residential construction did not expand quickly enough to absorb the additional demand, creating a housing demand shock in metropolitan areas already facing constrained housing supply.

According to the report, unauthorised immigration in the analysed urban area accounted for about 30 per cent of employment growth, around 30 per cent of house price growth and roughly 20 per cent of rent growth between March 2021 and March 2024.

However, other factors, including limited housing supply, higher construction costs, elevated mortgage rates and broader macroeconomic conditions, also influenced the US housing market during the period.

The study describes the years from 2021 to 2024 as an "unprecedented boom" in unauthorised immigration.

Drawing on estimates from the Congressional Budget Office, the researchers note that net unauthorised immigration increased the US population by around seven million people before declining sharply in the middle of 2024.

According to The Washington Post, the findings are likely to significantly feature in the current political debate over immigration policy, with Republicans arguing that the surge placed additional pressure on housing and public services, while Democrats maintain that the influx helped address labour shortages and supported economic growth.