As the U.S. housing affordability crisis continues to squeeze household budgets across the country, the debate surrounding its root causes has intensified. During comments to reporters on Air Force One on July 8, 2026, President Donald Trump claimed that unauthorized immigration under the previous administration was the primary driver of the nationwide spike in housing costs, alleging that immigration caused a 40% to 50% increase in rents and home prices.
To support this claim, administration spokespersons and political surrogates have repeatedly cited a working paper published in March 2026 by economists from the Federal Reserve Banks of Dallas and San Francisco. Because this study represents one of the most comprehensive academic efforts to isolate the economic effects of the recent migration surge, analyzing its actual findings is critical to determining the accuracy of the president's claims.
- Significant Exaggeration: Unauthorized immigration accounted for approximately 4.3 percentage points of the 22.6% total rise in rents—representing about 19% of the rent growth, not a 40% to 50% total cost increase.
- Federal Reserve Source: The claim relies on Dallas Fed Working Paper 2607, but conflates the study's relative contribution metric with the absolute rise in housing costs.
- No "Empty Unit" Evidence: There is no empirical data supporting the claim that undocumented immigrants were housed in empty units to artificially inflate market rates.
- Structural Drivers: The primary causes of the housing affordability crisis are a structural supply deficit of 3.7 million units and mortgage rates soaring from 3% to over 7%.
1. THE CLAIM
"We had a 40 and 50% increase in housing and rental costs because of the millions of illegal aliens that came in. They were housing illegal aliens in all of those empty units, which drove the prices up to levels that nobody has ever seen before."
President Donald Trump, Remarks on Air Force One, July 8, 2026
2. THE INVESTIGATION
To evaluate the assertion that unauthorized immigration caused a 40% to 50% rise in housing costs, we must examine the specific academic research that political surrogates use to back the claim. The primary source cited is Dallas Fed Working Paper 2607, circulated in March 2026, titled "The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata." The study was conducted by economists Daniel J. Wilson of the Federal Reserve Bank of San Francisco and Xiaoqing Zhou of the Federal Reserve Bank of Dallas.
The researchers utilized a newly developed dataset combining administrative microdata to track the geographic distribution of unauthorized immigrant inflows and their corresponding effects on local employment, wages, and housing markets between early 2021 and early 2024. During this three-year window, the U.S. experienced a historic migration surge, making it an ideal period for study. However, the paper's actual conclusions differ sharply from the public characterizations made by political figures.
The study found that the influx of unauthorized immigrants did act as a demand shock in housing markets, particularly in metropolitan areas with inelastic housing supplies. In the average U.S. metropolitan area, the cumulative increase in rental prices during the study period was 22.6%. The authors' model estimated that the unauthorized migration surge accounted for approximately 4.3 percentage points of this 22.6% increase.
安排 mathematically, dividing 4.3 by 22.6 reveals that unauthorized immigration was responsible for roughly 19% (about one-fifth) of the rent growth observed during the post-pandemic period. The remaining 81% of the rental price increase was driven by other macroeconomic factors. In terms of home purchase prices, the researchers estimated that an influx of unauthorized workers equivalent to 1% of a local workforce was associated with a 2.2% rise in local home values. In the metro areas most affected by migration, immigration accounted for roughly 30% of house price growth, which is still a fraction of the total price growth and far below the claimed 40% to 50% absolute increase.
To establish these findings, Wilson and Zhou bypassed traditional, often unreliable census surveys, which frequently undercount transient populations. Instead, they synthesized several administrative data sources to map migration flows accurately. The researchers relied on three primary data categories:
- USCIS Border Tracking: Active administrative records from U.S. Citizenship and Immigration Services showing asylum applications, humanitarian parole authorizations, and notice-to-appear filings.
- ICE Enforcement Logs: Enforcement data and detention logs that indicate regional transit densities and spatial settlement distributions of recently arrived non-citizens.
- DMV and State Registrations: Non-citizen driver's license applications and municipal address updates, which provide a high-frequency signal of where individuals actually settle.
By correlating this localized inflow data with zip-code level rental contracts and home transactions, the economists isolated the specific price pressure exerted by new migrants. Their results showed that the impact of immigration varies dramatically by metropolitan geography, depending on the local supply elasticity and the historical volume of migrant inflows:
- High-Impact Gateways: Cities like Miami, Dallas, Houston, and New York saw substantial inflows, where unauthorized immigration contributed up to 30% of local rental price growth due to tight zoning constraints.
- Moderate-Impact Belts: Mid-sized manufacturing hubs in the Midwest and South experienced moderate demand increases, with immigration accounting for 10% to 15% of rent growth.
- Low-Impact Markets: Inelastic or declining metropolitan areas like Pittsburgh, Cleveland, and Buffalo saw virtually no statistically significant price pressure linked to migration.
Furthermore, there is no evidence to support the claim that undocumented immigrants were housed in "empty units" to drive up prices. The Federal Reserve study outlines that the pressure on housing markets resulted from normal demand-side dynamics as new residents entered local economies and sought housing in the private market, rather than any government program occupying vacant housing stock.
3. THE EVIDENCE
To put the impact of unauthorized immigration into perspective, it is necessary to examine the broader factors driving the U.S. housing crisis. Economists generally agree that the post-pandemic surge in housing and rental costs was driven by a combination of long-term structural supply failures and immediate monetary policy shifts.
The national housing market has been shaped by three main factors over the past five years:
- The Structural Supply Shortage: According to research by Freddie Mac, the U.S. entered the pandemic with a housing deficit of 3.7 million units, a direct result of underbuilding relative to population growth since the 2008 financial crisis. This shortage is widely considered by economists to be the primary long-term driver of high housing costs.
- Interest Rate and Monetary Shocks: To combat post-pandemic inflation, the Federal Reserve aggressively raised its benchmark interest rate, causing average 30-year fixed mortgage rates to climb from roughly 3% in early 2021 to over 7% by late 2023. This rate hike locked existing homeowners into their low rates, freezing inventory and pushing home buyers into the rental market.
- Pandemic-Era Demand Shifts: The sudden rise of remote work during the COVID-19 pandemic triggered a historic shift in household formation, as individuals sought larger living spaces and relocated away from dense urban centers, driving up prices in suburban and secondary markets.
The core reason demand shocks—whether from domestic remote workers or international migrants—result in soaring prices is the lack of housing supply elasticity. When a market is elastic, developers respond to rising demand by quickly building more housing, keeping prices stable. In the U.S., local regulatory environments have made housing supply highly inelastic. Economists point to several key regulatory barriers that prevent the market from adjusting:
- Single-Family Zoning: Local zoning ordinances that prohibit the construction of multi-family duplexes or apartment buildings on the vast majority of residential land.
- Minimum Lot Sizes: Regulations requiring homes to be built on excessively large plots of land, which inflates land costs and limits density.
- Parking Minimums: Mandates requiring developers to build multiple off-street parking spaces per unit, which adds substantial cost and reduces buildable space.
- Lengthy Permitting Processes: Protracted approval timelines and environmental reviews that can delay housing projects for years, adding financing costs that are passed on to renters and buyers.
The following table compares the relative impact, primary mechanisms, and consensus policy solutions for the three main factors driving the housing affordability crisis, using the findings from the March 2026 Dallas Fed working paper and broader housing market data.
| Housing Cost Driver | Estimated Contribution to Price Growth | Primary Economic Mechanism | Consensus Policy Solution |
|---|---|---|---|
| Underbuilding & Supply Deficit | Estimated 50% to 60% of long-term price appreciation | ▲ Leading driver; chronic deficit of 3.7M units limits supply | Zoning reform, streamlining local building permits, and density incentives |
| Mortgage Rate Shocks | Estimated 20% to 30% of buyers' monthly cost increases | ≈ Parity in impact; high rates freeze existing inventory and raise monthly payments | Macroeconomic stabilization and gradual rate reductions as inflation cools |
| Unauthorized Immigration | Attributed 19% of rent growth and 30% of home price growth in high-impact metro areas | ▼ Behind supply factors; localized demand shock in inelastic LEO/metropolitan rentals | Targeted housing construction support in high-migration cities and border enforcement |
The comparison table shows that while unauthorized immigration does contribute to housing costs by acting as a localized demand shock, it is mathematically minor compared to the structural deficit of 3.7 million units and the interest rate hikes that have frozen the market. Attributing the entire 40% to 50% cost increase solely to immigration ignores the primary structural and monetary forces at play. In fact, many housing analysts argue that focusing exclusively on immigration distracts policy makers from addressing the core zoning reforms and density incentives needed to unlock new housing starts. Without significant structural changes to how homes are approved and built, housing costs will remain high even if migration rates drop to zero.
4. THE VERDICT
In conclusion, the empirical data uncovers that political rhetoric has significantly exaggerated the findings of the Federal Reserve Bank of Dallas and San Francisco. While the surge in unauthorized immigration between 2021 and 2024 did increase demand for housing and contribute to price growth in specific metropolitan areas, it was not the primary driver of the national housing crisis. Attributing a 40% to 50% rise in housing costs solely to immigration is mathematically incorrect and misrepresents the complex macroeconomic reality of the U.S. housing market. The primary structural issues—decades of underbuilding due to restrictive local zoning policies and the sudden rise in mortgage rates—are the genuine culprits. Policy solutions must address these core supply barriers to make housing affordable again.
Furthermore, policy discussions that focus exclusively on demand-side solutions, such as mass deportations, as a primary mechanism to lower housing costs are likely to have unintended economic consequences. Economists note that deporting unauthorized workers could reduce labor supply in the construction sector, where unauthorized workers make up a significant portion of the labor force. This could lead to higher construction costs and a further slowdown in new housing starts, ultimately exacerbating the supply deficit. A comprehensive solution requires a balanced approach that addresses both housing supply and immigration policy in a coordinated manner.
- Federal Reserve Bank of Dallas — "The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata" (Working Paper 2607), Daniel J. Wilson & Xiaoqing Zhou, March 2026. dallasfed.org
- PolitiFact — "Fact-checking Trump's claims on housing costs and illegal immigration", July 2026. politifact.com
- Freddie Mac — "Housing Supply Shortage Estimate and Market Outlook", 2024. freddiemac.com
- The Washington Post — "How economists view the impact of migration on housing affordability", 2026. washingtonpost.com
- WRAL News — "Fact Check: Trump says illegal immigration caused 40% rise in housing costs", July 16, 2026. wral.com
- Harvard Joint Center for Housing Studies — "The State of the Nation's Housing", 2025. harvard.edu
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