Key Takeaways
- San Francisco Fed economists found that the 2021–2024 unauthorized immigration surge raised rents and home prices without expanding housing supply.
- The paper attributes about 30% of home-price growth and 20% of rent growth in the average metro to the inflow.
- Families priced out of housing absorbed a cost that officials and media often treated as unrelated to border policy.
What Happened
A San Francisco Federal Reserve working paper estimates that the 2021–2024 surge in unauthorized immigration caused roughly 30% of home-price growth and 20% of rent growth in the average U.S. metropolitan area.
Economists Daniel Wilson of the San Francisco Fed and Xiaoqing Zhou of the Dallas Fed used immigration-court records obtained through the Freedom of Information Act to build new measures of unauthorized immigrant worker flows. They compared those flows with Zillow prices and rents, local employment data, wages, permits, and construction work.
Their October paper found that an inflow equal to 1% of a metro’s initial employment raised local home prices 2.2% and rents 1.4%. Applied to the actual surge, the authors estimated a 6.7% home-price increase and a 4.2% rent increase in the average metro. Those increases represented about 30% and 20% of total growth during the period. The median metro saw smaller shares, about 13% for prices and 8% for rents.
The housing supply did not catch up. The researchers found no significant increase in building permits or construction employment. They also reported that employment grew roughly one-for-one with the worker inflow, while evidence of wage depression was mixed.
Treasury Secretary Scott Bessent promoted the rent finding on October 30. The numbers require care. President Donald Trump’s earlier statement that immigration drove prices up 30% confused a share of price growth with the actual estimated increase of 6.7%.
Some economists also question the size of the estimate. Realtor.com economist Jake Krimmel called the study credible but said low mortgage rates, remote work, and years of underbuilding also drove the housing shock. Redfin economist Daryl Fairweather argued that pandemic-era domestic migration may not be fully separated from the immigration effect.
Why It Matters
Government has a duty to account honestly for the costs created by its border decisions. Families who lost bidding wars or watched rent consume more of each paycheck were harmed by a housing shortage made worse by added demand. They deserved a candid explanation while the surge was happening. If officials refuse to connect immigration policy with pressure on homes, voters cannot judge the full price of those decisions or demand a plan that matches population growth with housing supply.
The Bigger Picture
The paper describes the early 2021 through early 2024 inflow as unprecedented after two decades of near-zero net unauthorized immigration. It cites a Congressional Budget Office estimate that the episode added about 7 million people to the population.
The findings do not show that immigration caused the entire housing crisis. Mortgage rates, remote work, limited construction, and local zoning also mattered. The paper is a working paper, and its authors state that it does not represent the Federal Reserve System. Its contribution is narrower: it puts a measurable housing cost on a border surge that public debate often separated from the affordability crisis.
Sources & Related Reading
- San Francisco Fed: Working Paper 2026-23
- Full working paper PDF
- Newsweek analysis and expert responses
- Scott Bessent statement
