Dallas Fed Paper Quantifies Unauthorized Immigration's Role in 2021-2024 Housing Cost Surge

A Federal Reserve Bank of Dallas working paper released in 2026 provides empirical analysis of the effects of the post-2021 unauthorized immigration boom on U.S. labor and housing markets. Authors Daniel J. Wilson and Xiaoqing Zhou use administrative microdata from immigration court records and government sources to examine local market impacts from early 2021 through early 2024.

The study finds that a 1% increase in unauthorized immigrant worker flows relative to initial employment levels raised local employment by approximately 0.96%, with no significant negative effects on average weekly wages. However, the same inflow correlated with a 2.2% increase in local home prices and a 1.4% rise in rents. Researchers attribute this to a housing demand shock amid relatively inelastic short-run housing supply, noting little evidence of expanded homebuilding to offset the added demand.

The paper estimates that these inflows accounted for roughly 30% of home price growth and 20% of rent growth in the average local market during the period. This aligns with broader reporting on the immigration surge's economic footprint, as covered by Fox Business and Fox News, which highlight the paper's findings on elevated shelter costs without corresponding supply responses.

The analysis underscores how localized population inflows can intensify affordability challenges in supply-constrained markets, separate from factors like interest rates or institutional investment often emphasized in mainstream coverage. The Dallas Fed document itself and its abstract on the bank's site detail the methodology and results, while related discussions on platforms like RePEc and Hacker News reference the paper's implications for labor income per capita and public finances.