Staff Reports
The Federal Reserve Bank of Dallas dropped a bombshell working paper this week. Its authors used new administrative data and found that the recent surge in unauthorized immigration played a big role in driving up U.S. home prices and rents. For families who thought the housing crisis had nothing to do with the border, this paper is the rude wake-up call.
What the Dallas Fed actually found
The working paper by Dallas Fed economists Daniel Wilson and Xiaoqing Zhou estimates that the wave of unauthorized immigration from 2021–2024 helped explain roughly 30 percent of house-price growth and about 20 percent of rent growth in the average metro area during that boom. The authors also cite a net increase on the order of 7 million people during that period. They say local employment rose roughly one-for-one with the new worker flows, but housing supply did not expand fast enough to absorb the added demand. The paper is labeled a working paper and the authors note their back-of-the-envelope calculations and averages vary across cities, so it is preliminary but important evidence.
Why this matters for ordinary Americans
Young families and first-time buyers are already squeezed. Median home prices moved from much more affordable levels a generation ago to levels most new workers cannot reach now. When demand spikes and builders can’t or won’t build fast enough, prices shoot up. This Dallas Fed analysis helps explain why rents and houses got so expensive so quickly — not from magic, but from more people competing for too few homes.
Policy failure, and whose fault it is
The authors carefully measure flows; they do not write policy memos blaming teams in the White House. But let’s be blunt: the timing and scale of the inflows coincided with the weak border enforcement of the Biden years. If you open the door and millions walk in, you will see pressure on local housing and services. That is common sense, and now an independent Federal Reserve working paper gives the common-sense view empirical weight. Saying “that’s just economics” is a cop-out — it was a predictable policy outcome.
Bottom line: close the gap between words and action
We need a border policy that actually keeps people from entering illegally and a plan to speed housing supply where demand is highest. Republicans should use this Dallas Fed study as a clear talking point: the border is not just a security issue, it is an economic one that hits working families in the wallet. If lawmakers want to tame housing costs, they will stop pretending the border doesn’t matter and start fixing both the border and the housing market at the same time.
