A new Federal Reserve Bank of Dallas working paper estimates the record surge in illegal immigration during the Biden administration boosted employment while causing 30% of home price increases and 20% of rent increases.

The paper combined immigration court records with government administrative data to create the first ever calculation of how a wave of 7 million illegal immigrants from 2021 through 2024 affected local labor and housing markets.

"From early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode," the working paper said.

"The total weighted-mean increases in house prices and rents over this period were 22.4% and 22.6%, respectively. Putting these together, for the average MSA, UIWF can explain approximately 30% of the total increase in house prices and 20% of the total increase in rents," it added.

You can read the full paper here. 

The researchers said they found little evidence that homebuilding expanded enough to meet the added demand, essentially creating a demand shock in markets where supply was already constrained.

The authors cautioned that the study is a preliminary draft circulated for professional comment and does not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.