President Donald Trump questioned former President Joe Biden over soaring housing costs, pointing to a recent Federal Reserve Bank of Dallas working paper to ask whether an “illegal immigrant” wave drove 30% of the recent surge in U.S. home prices.
Market ‘Demand Shock’
The debate centers on a newly released working paper estimating the economic impacts of approximately seven million unauthorized immigrants entering the country between 2021 and 2024.
According to the researchers, these unauthorized immigrant worker flows acted as a “demand shock” to local housing markets, boosting prices and rents in the face of relatively inelastic short-run housing supply.
“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,” the working paper states.
While this influx boosted local employment nearly one-for-one without causing significant wage declines, it simultaneously strained existing housing availability.
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Deconstructing The 30% Statistic
In a July 6 Truth Social post, Trump said that the Fed paper “suggests Biden illegal immigrant wave drove up home prices 30%.” However, the study clarifies the specific math behind this statistic.
The researchers found that the total weighted-mean increase in house prices over this boom period was actually 22.4%. “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,” the authors wrote.
Mathematically, this means unauthorized immigration contributed to an implied effect of roughly 6.6% on average home prices, rather than driving up the total baseline cost of homes by a flat 30%.
Preliminary Findings
The Dallas Fed notes that the working paper is a preliminary draft circulated for professional comment. The conclusions represent the views of the authors alone and do not necessarily reflect the official stance of the Federal Reserve Bank of Dallas or the broader Federal Reserve System.
As the political debate over immigration and housing supply heats up, market watchers are closely monitoring the performance of key real estate and homebuilder ETFs tied to these trends.
| ETFs | YTD Performance | 6-Month Performance | One Year Performance |
| iShares U.S. Home Construction ETF (BATS:ITB) | 5.77% | 6.85% | 4.93% |
| SPDR S&P Homebuilders ETF (NYSE:XHB) | 9.32% | 7.66% | 8.52% |
| Vanguard Real Estate Index Fund ETF (NYSE:VNQ) | 9.86% | 10.77% | 9.01% |
| Real Estate Select Sector SPDR Fund (NYSE:XLRE) | 9.72% | 10.73% | 6.94% |
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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