President Donald Trump and his advisers are promoting a draft Federal Reserve paper as proof of a claim he has pressed for years: that a surge of illegal immigration under President Joe Biden made American housing less affordable.
Trump wrote on his social-media platform on Sunday that the study suggests “Biden illegal immigrant wave drove up home prices 30%.”
The paper’s findings are more qualified. Immigration pushed up housing costs — but by less than the president suggested, and through a mechanism that has little to do with legal status: demand for housing arrived in markets where, over three full years, home building never responded.
Drafted by economists Daniel Wilson of the San Francisco Fed and Xiaoqing Zhou of the Dallas Fed, the working paper is the first systematic attempt to measure the local economic effects of what the authors call an unprecedented boom in unauthorized immigration, which added 7 million people to the U.S. population between early 2021 and early 2024.
The authors used restricted court records showing where immigrants settled, along with records of migrants granted temporary permission to enter the country. The study found that an inflow of unauthorized workers equal to 1 percent of the local workforce raised area home prices about 2.2 percent and rents about 1.4 percent, with no detectable pickup in home building to absorb the demand.
These estimates imply that, in the average metropolitan area, unauthorized immigration raised house prices by 6.6 percent from early 2021 to early 2024. The actual home price growth was 22.4 percent in those markets over the period. This means unauthorized immigration explains roughly 30 percent of home-price growth — a meaningful contribution, but not a 30 percent increase in home prices as stated by Trump.
And because unauthorized arrivals clustered in a handful of large cities, the effect in the typical American market was smaller: about 13 percent of price growth and 9 percent of rent growth.
The finding is notable because the Trump administration has been making the claim that immigrants drive up housing prices without research to support it. Vice President JD Vance asserted that home prices “literally doubled” under Biden — sales-price measures show at most a 37 percent increase — and blamed “20 million illegal aliens” for “taking homes,” a figure fact-checkers found exaggerated.
The new paper — a preliminary draft that carries the standard caveat that it does not represent the views of the Federal Reserve system — is the first credentialed evidence in the administration’s direction.
The study has been called out on the campaign trail before Trump picked it up. At a June 24 Republican primary debate in Arizona’s 1st Congressional District, Jay Feely — a former National Football League kicker endorsed by Trump — cited the study directly, telling the audience that “30 percent of the cost of buying a home are because of illegals.”
The paper makes a different claim: that unauthorized immigration can explain about 30 percent of the growth in home prices in the average metropolitan area over three years — an effect of roughly 6 to 7 percent on prices, not 30 percent of what a home costs.
The paper also supports a narrower conclusion than the one being drawn from it. The same inflows of immigrants that raised housing costs also raised local employment roughly one-for-one, with no significant decline in wages. And they sharply reduced the safety-net payments flowing to those areas, consistent with newly arrived working-age immigrants holding jobs while remaining ineligible for unemployment insurance, food assistance and Medicaid.
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