Newsweek29%
Did Biden’s Immigration Surge Push Up Home Prices? What the Data Says 9%
By Giulia Carbonaro15%
7/15/2026, 9:00:00 AM
BS Summary: This article contains 33 faulty reasoning types, including Appeal to Authority, Representativeness Heuristic, and Negativity Bias, with Post Hoc (False Cause) as the most egregious example at 20.1% saturation with 367 hits. Analysis detected 2,822 faulty-reasoning hits from 1,824 analyzed words, generating a BS Score of 25.5% and a BS Rank of 9% (14,598 of 15,918 articles). This article is better (less manipulative) than 91.70% of the article peer group.
The Trump administration has been touting a working paper by the Federal Reserve Bank of Dallas, claiming it proves what it has been saying for years: that a surge in illegal immigration under President Joe Biden is what brought U.S. housing costs through the roof.
“Biden illegal immigrant wave drove up home prices 30 percent,” President Donald Trump wrote on Truth Social on July 5, citing the study.
In an interview with Fox News host Sean Hannity, Vice President JD Vance said: “A lot of young people are saying housing is way too expensive.
Why is that?
Because we flooded the country with 30 million illegal immigrants.”
People entering the country illegally, he said, were “taking houses that ought by right go to American citizens” while the nation was not “building enough new houses to begin with.”
But the Dallas Fed’s draft that both Trump and Vance are leaning on is much more nuanced in where it puts the blame—showing that illegal immigrants brought home prices up by less than the president says, and mostly because the country struggled to ramp up new construction in the face of higher demand.
What Does the Working Paper Say?
The paper, written by economists Daniel J.
Wilson of the San Francisco Fed and Xiaoqing Zhou of the Dallas Fed, is an attempt at measuring the impact of the surge in illegal immigration recorded by the country between early 2021 and early 2024 on the local economy.
Newsweek has contacted the two economists for comment by email on Tuesday.
As a preliminary draft, the study does not represent the views of the Federal Reserve system, but it is mostly aimed at being discussed among experts.
The authors argue that the nation faced an “unprecedented” boom in arrivals during that period, adding roughly 7 million people to the U.S. population, based on data shared by the U.S.
Congressional Budget Office.
Using restricted court records to track where these immigrants settled, Wilson and Zhou found that an inflow of unauthorized workers equal to 1 percent of the local workforce raised home prices by 2.2 percent and rents by 1.4 percent, while triggering no new construction to absorb this higher demand.
Based on these findings, they estimated that the average metropolitan area in their dataset saw a 22.4 percent house price increase between early 2021 and early 2024.
They then calculated that among that increase, 6.6 percent was due to the inflow of unauthorized immigrant workers.
That means that illegal immigration was behind 30 percent of home-price growth between early 2021 and early 2024, according to the authors—not, as Trump said, that it caused home prices to rise by 30 percent.
While expressing respect for the authors and their paper, other housing experts are skeptical of their findings.
“This is a careful, credible study, and the direction of the findings, for local areas in the short run, is exactly what the laws of supply and demand predict.
An influx of immigrant workers in a specific area increases demand for housing in that area,” Jake Krimmel, senior economist at Realtor.com, told Newsweek of the working paper.
“Over the short run, the supply of housing is pretty inelastic.
That is, it takes a while for new home construction to catch up to that demand shock.
So in the short run, house prices will rise as demand outstrips supply,” he added.
In effect, Rome wasn't built in a day and neither are homes.
Building new homes to accommodate new arrivals takes time.
Before new builds hit the market, prices will have inevitably risen in the meantime.
The findings cannot be taken out of context: the working paper found that home prices increased by 6.6 percent in the average metro area—not nationwide.
“These are large urban areas that received the biggest immigration inflows,” Krimmel said, highlighting the specifics of this phenomenon.
The study also covers a short window, March 2021 to March 2024, “before housing supply had a chance to respond,” according to Krimmel.
“There’s reason to believe these effects could dissipate over time,” he said.
“The study tells us what happened in high-immigration metros over three unusual years.
It does not tell us that immigration permanently raised home prices across America.”
Daryl Fairweather, chief economist at Redfin, told Newsweek that there are some “inherent problems” with the authors’ methodology.
“For example, the paper assumes cities that were attractive to immigrants pre-pandemic, were equally attractive to immigrants from 2020-2022.
But this isn’t the case,” she said.
“Remote work fundamentally changed domestic patterns in migration.
High-income Americans moved to migration destinations, which have historically attracted international immigrants—Austin, Phoenix, Miami,” she continued.
“This change in domestic migration increased the need for laborers in these migration destinations and served as a catalyst for more international immigration.
This analysis doesn’t directly control for domestic migration and therefore doesn’t fully disentangle the effect of domestic migration on home prices from the effects of international immigration.”
The 6.6 percent finding identified by the authors, Fairweather said, “feels implausibly large.”
The Role of Illegal Immigration in Home Price Growth—Explained
The working paper by the Dallas Fed and San Francisco Fed economists found that immigration “was a meaningful contributor, but it did not explain the lion’s share of house price growth” in the cities affected by their arrivals, Krimmel said.
“Record-low mortgage rates, remote work reshuffling where people live, and a decade of underbuilding were all pushing prices up at the same time.
Immigration is only part of the story,” he explained.
“It’s important to keep in mind the study is about average effects in the average metro area, which saw large increases in unauthorized immigration, not nationwide effects and not median effects.”
Generally, it is true that there is a positive relationship between immigration and home price growth, Krimmel said—with higher levels of immigration being connected to higher home prices.
“Some of this is correlation but not causation,” he said.
“Immigrants move to larger cities with booming job markets, where house prices may already be rising.
But the study does a careful job to speak strictly to causation and finds a positive causal effect on house prices and rents, though this is driven by large metros."
But the study by the Dallas Fed and San Francisco Fed economists shows a puzzling bit of information: the effects on rents were smaller than the effects on house prices.
“We would expect unauthorized immigrants to impact rents more, given they’re more likely to be renters.
To me, this implies it’s not as simple as immigrants bidding up home prices directly,” Krimmel said.
“Immigration grows labor markets and pushes up local rents, which in turn increases demand for owned homes.”
It is also slightly different for illegal immigrants, who “often live in over-crowded housing, taking up fewer housing units per person than citizens,” Fairweather said.
“H1-B visa workers do buy homes, and there has been reporting that the lack of H1-B workers in Dallas is weakening demand for homes there.”
The H-1B visa allows U.S. employers to hire foreign workers in specialty occupations requiring specialized knowledge and at least a bachelor's degree or equivalent experience.
The program is widely used in the technology sector but also supports hiring in fields such as engineering, health care, finance and research.
According to a 2024 analysis by Harvard University’s Joint Center for Housing Studies (JCHS), the timing of the surge in immigration to the U.S. (2022-2024) did not correspond to the years when home prices spiked (2020-2021).
Researchers pointed instead at “the historically large millennial generation (born 1980–1994) being at prime homebuying ages (26–40 in 2020) with years of pent-up demand from delayed household formation after the economically damaging effects of the Great Recession” for the sudden rise in price in the first pandemic years, together with higher mortgage rates.
They highlight that immigrants actually play a positive role in the housing market in the long term, expanding “the supply of much-needed homes given their outsized role in the construction industry.”
The working paper by Wilson and Zhou found that the same inflows of immigrants that partly raised housing prices between 2021 and 2024 also raised local employment roughly one-for-one, while there was no significant decline in wages.
Safety-net program payments to the areas affected by these waves of immigrants declined.
Trump Blamed Immigrants—Why Did Home Prices Not Fall With Deportations?
In the lead-up to the 2024 presidential election, Trump vowed to fix the nation’s housing affordability crisis by deporting millions of illegal migrants.
In the 12 months following his inauguration in January 2025, his administration said nearly 3 million “illegal aliens” left the country, including an estimated 2.2 million “self-deportations” and more than 675,000 deportations.
But while home price growth has slowed down significantly compared to the pandemic frenzy, prices are still rising and have reached an all-time high only last month, while mortgage rates are still hovering around the 6.5 percent mark.
“Why haven’t prices dropped?
Demand shocks work both ways,” Krimmel said.
“A positive demand shock like an immigration boom pushes up housing demand, while a population bust tempers it.
But demand slowdowns don’t necessarily mean prices will fall,” he added.
“It often just means price growth slows down.
Prices can still climb nominally, just more slowly than they otherwise would.”
That is consistent with what we are seeing in the U.S. housing market now.
“Home price growth has cooled considerably, and slowing population growth is one reason why, especially in metros that received the largest inflows.
But it’s one factor among several.
Elevated mortgage rates and rising inventory are doing most of the work,” Krimmel said.
“Housing markets also adjust asymmetrically.
Prices respond quickly when demand surges against fixed supply, but they fall slowly and reluctantly on the way down.
So the more likely place to see the immigration reversal show up is rents, not home prices, and in the specific metros that saw the biggest inflows.”
Prices have been falling in some parts of the country over the past few years, especially in Sun Belt markets which added a lot of new inventory—but this has little to do with illegal immigrants and more to do with new construction.
“Prices have been stickier in places that restricted new construction of homes during the pandemic—cities on the coasts,” Fairweather said.
“It’s very difficult to disentangle the supply effects from more new construction, from the trends in immigration.
Since the places that had the biggest surges and declines in immigration tend to be the same places that had the biggest surges in new construction,” she added.
The reason why we live in “unprecedented times” when it comes to housing is not immigration, experts say, but a chronic shortage of affordable homes that is unlikely to be fixed any time soon, unless serious efforts are made by lawmakers at the federal, state, and local level.
Contact Newsweek editors on this story: Ben Kelly and Yannick Demoustier.
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