Soaring home prices have been blamed on everything from low housing inventory to high interest rates. But a new report from the Federal Reserve Bank of Dallas is drawing attention to another factor: the unprecedented surge in illegal immigration during the Biden administration.

According to the report, roughly 7 million people were added to the U.S. population through unauthorized immigration between 2021 and 2024, averaging about 1.75 million annually. Researchers found that these population increases placed overwhelming pressure on local housing markets, pushing both home prices and rents higher.

Their analysis concluded that an influx of unauthorized immigrant workers equal to 1% of a local area’s workforce increased home prices by 2.2% and rents by 1.4%. The study estimated that unauthorized immigration may have accounted for about 30% of total home price growth and 20% of rent growth during the housing boom. Those findings come as the foreign-born population in the U.S. climbed to nearly 52 million, the highest level ever recorded.

The report also cited findings from the Department of Housing and Urban Development, which concluded that immigration-driven household growth significantly increased housing demand between 2021 and 2024. In some markets, HUD found immigration accounted for nearly all of the increase in housing demand. Researchers argue that when millions of new residents enter the country faster than homes can be built, affordability challenges become even more severe for existing residents trying to buy or rent a home.

Housing affordability has become one of the biggest financial challenges facing American families, and the findings in the Dallas Fed report suggest the problem may be tied to more than just interest rates or a lack of construction…

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For many first-time buyers, the dream of homeownership is already slipping out of reach as they compete in markets where demand continues to outpace available housing. Even Americans who are not looking to buy a home can feel the effects through higher rents, rising property taxes, and increased competition for limited housing stock.

The findings arrive as the Trump administration has made reducing illegal immigration a central policy objective. If rapid population growth contributed to housing demand, as the report suggests, supporters of stricter border enforcement maintain that lower levels of illegal immigration will substantially ease pressure on housing markets over time.

While increasing housing supply remains a key aspect of improving affordability, the report is likely to fuel arguments that controlling illegal immigration should also be part of the conversation. As lawmakers weigh future housing and immigration policies, the debate may increasingly focus on whether reducing demand is just as important as building more homes.

When millions of people are added to the population in a short period of time, they need places to live, creating additional competition for homes and apartments. It’s simple math; more people create more demand, and with the construction of new homes at their lowest in six years, supply is increasingly limited. For Americans trying to buy their first house, that means higher prices, bidding wars, and larger monthly mortgage payments.

When housing demand rises faster than new homes can be built, affordability suffers. As policymakers look for ways to make housing more attainable, the report adds weight to arguments that reducing illegal immigration will drastically ease pressure on housing markets.

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