Trump blames unauthorized immigration during Biden era drove up housing costs

🏡🇺🇸 New Federal Reserve research reignites debate over immigration’s role in U.S. housing affordability

A newly released Federal Reserve working paper has sparked fresh debate over the relationship between immigration and America’s housing affordability crisis after concluding that unauthorized immigration contributed to rising home prices and rents in parts of the United States during the 2021–2024 period. The research has quickly become a focal point in the national political conversation, particularly after President Donald Trump cited the findings while criticizing the Biden administration’s immigration policies.

The study, authored by economists Daniel Wilson of the Federal Reserve Bank of San Francisco and Xiaoqing Zhou of the Federal Reserve Bank of Dallas, examined local housing markets using immigration court records and administrative data to evaluate how rapid population growth affected residential real estate.

According to the analysis, an increase in unauthorized immigrants equal to 1% of a local labor force was associated with approximately 2.2% higher home prices and 1.4% higher rental costs in affected metropolitan areas. Researchers concluded that the surge in housing demand outpaced the pace of new residential construction, creating additional upward pressure on prices.

President Trump highlighted the report on social media, arguing that the immigration surge during the Biden administration significantly contributed to America's housing challenges. However, economists noted that the study does not conclude that unauthorized immigration directly increased home prices by 30%, as suggested in some public discussions.

Instead, the paper estimates that unauthorized immigration accounted for roughly 30% of total home price growth within certain average metropolitan areas, meaning it contributed only a portion of the overall increase. Since home prices in those markets rose by approximately 22.4% during the study period, the immigration-related contribution equates to roughly 6–7 percentage points rather than a 30% overall increase.

The report also emphasizes that housing supply constraints played a central role. Researchers argue that local governments and developers were unable to expand housing inventory quickly enough to accommodate the rapid population increase, creating a classic imbalance between supply and demand.

Beyond housing, the study found broader economic effects. Areas experiencing higher immigration generally saw increased employment without measurable downward pressure on average wages. Researchers also observed relatively lower spending on certain public assistance programs, noting that many unauthorized workers remain ineligible for major federal benefits despite participating in the labor market.

The findings add new data to one of America's most politically charged policy debates, illustrating that housing affordability depends on multiple factors—including population growth, housing construction, labor markets, and local zoning policies—rather than any single variable. Economists say future policy discussions will likely focus not only on immigration but also on expanding housing supply to better absorb long-term population growth.