Does illegal immigration impact the U.S. housing market, and if so, to what degree? This issue arose during Tuesday, Oct. 1’s debate.
“Senator Vance, you said you don’t like the economists. Which economists are saying that immigrants are adding to the cost?” Minnesota Gov. Tim Walz, D, asked Ohio Sen. JD Vance, R.
“Senator, I’d like you to clarify,” said Margaret Brennan, the CBS moderator. “There are many contributing factors to high housing costs. What evidence do you have that migrants are part of this problem?”
“Well, there’s a Federal Reserve study we’re happy to share after the debate. We’ll put it up on social media, actually, that really drills down on the connection between increased levels of migration, especially illegal immigration, and higher housing prices,” Vance said.
Vance took to X after the debate to post a link to an economic speech given in May by Michelle Bowman, a member of the Board of Governors of the Federal Reserve. He highlighted an excerpt in which she said, “Given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize.”
Vance also linked to two other studies. One from the Journal of Housing Economics stated, “Immigration inflows into a particular metropolitan statistical area (MSA) are associated with increases in rents and house prices in that MSA while also seeming to drive up rents and prices in neighboring MSAs.”
A study by the nonpartisan Congressional Budget Office, titled “Effects of the Immigration Surge on the Federal Budget and the Economy,” found “the research literature has generally found that increases in immigration raise state and local governments’ spending—particularly on education, health care, and housing—more than their revenues.”
While these studies acknowledge a correlation between mass immigration and the housing crisis, Straight Arrow News wanted to determine the extent to which the increase in migrants impacts housing.
According to the Center for Immigration Studies, “As of 2024, the U.S. was short 4 to 7 million housing units. The foreign-born population has increased by 6.6 million since 2021, with 58% of this increase coming from illegal immigration.”
“Some estimates suggest immigration may increase overall housing demand by around 500,000 units per year,” the study read. “Consequently, housing costs and rents have risen in areas most affected by mass immigration, such as Miami and Denver, which have struggled to cope with a massive influx of migrants since 2021.”
While studies show an immediate impact on housing demand as immigration numbers climb, some economists cited by the Associated Press argue that immigrants are part of the solution to the lack of supply, noting that immigrants make up about 20% of the construction workforce needed to build more homes.
