Illegal Immigration Made Average New House $30K More Costly

Although Americans still express strong support for legal immigration, according to the latest Gallup survey, a large plurality, including Democrats, acknowledge immigration drives up housing costs and reduces availability.

The data confirm this impression. Mass immigration has contributed heavily to the dramatic housing price increases, a newly leaked draft working paper from the Federal Reserve confirms. Illegal immigration drove 30 percent of the increase in U.S. home prices from 2021 to 2024, along with 20 percent of the rise in rent prices, the researchers found.

In total, the (at least) seven million people who entered the United States illegally in those four years raised home prices by 6.6 percent, through a “housing demand shock in the face of short-run inelastic supply,” the authors observe.

The 2008 financial crisis pushed the annual growth of America’s housing supply far below the normal historical average, and it has remained well short of the norm ever since. Meanwhile, the number of U.S. households has rapidly increased.

Illegal immigration hit tsunami levels during the Joe Biden presidency, The Federalist’s Libby Bandelin reported: “From 2021-2024, the United States saw the largest influx of immigrants in its history.”

That has put an immense amount of pressure on a stagnant housing stock. The median price of new houses sold in January 2021 was $346,400, and the average price was $408,800, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Those prices rose by approximately $100,000 each, to $446,300 and $510,000 respectively, by January 2025.

That means illegal immigration, on its own, drove up the average price of a new house by $30,000 during the Biden administration.

It is important to note that the effect the Fed researchers identified was for illegal immigration only. Legal immigration pushes the total immigration effect on housing prices even higher, given that the housing supply is inelastic regardless of people’s legal status.

Net international migration to the United States was 379,000 in 2021, 1.7 million in 2022, 2.3 million in 2023, and 2.8 million in 2024, according to the U.S. Census Bureau: that is 7,179,000 people in four years. Center for Immigration Studies (CIS) Director of Research Steven Camarota put the number at 8.3 million, “larger than the individual populations of 38 states,” in a March 2025 New York Post op-ed.

These are net changes in population, the CIS noted in 2024, “offset by emigration and net mortality among the immigrant population,” thus representing the actual increase in the foreign-born population, not the number of immigrants (which would be higher, of course).

Compounding the problem was the fact that most of the new immigrants were not working, let alone building new houses. Less than half of all immigrants in the United States work. “The figures show that in the first quarter of 2024, 46 percent of those who arrived in 2022 or later were employed,” the CIS study states. “Many new immigrants are children, elderly, disabled, caregivers, or others with no ability or interest in working.”

Even able-bodied immigrants are far less likely to work than Americans. “The increase in immigration since the 1960s has coincided with a steady increase in the share of US-born men (ages 16 to 64) without a bachelor’s degree not in the labor force — neither working nor looking for work,” Camorata writes. “The percentage was 28% in January 2025, up from 20% in January 2000 and single digits in the 1960s. These individuals are not counted as unemployed because they are not actively looking for a job.”

Many of those non-workers add even more to the burden on the U.S. economy by taking government welfare benefits, including by exploiting poor monitoring of government programs for which they are not eligible. Illegal aliens are far more likely to go on welfare than native-born Americans. “Based on government data, we estimate that 59 percent of households headed by illegal immigrants use one or more major welfare programs, compared to 39 percent of households headed by the U.S.-born,” Camorata testified to a House Judiciary subcommittee in 2024.

Those immigrants’ children attend taxpayer-funded schools, costing an estimated $78 billion in 2022, according to the Foundation for American Immigration Reform. 29 percent of U.S. school-age children have an immigrant parent, Camorata wrote in his New York Post op-ed. Providing emergency medical care to illegal aliens costs American taxpayers another $7 billion a year, Camorata stated in his congressional testimony.

The CIS found that 39 percent of U.S. households headed by an illegal alien in 2022 used Medicaid, along with 36 percent of households headed by legal immigrants.

Thus, illegal aliens receive much more in government benefits than they pay in taxes, creating a per-person lifetime fiscal drain of about $68,000, Camorata told the congressional committee. Immigrants’ outsized use of federal welfare programs adds to the nation’s inflation problem and affordability crisis by increasing the federal deficit.

The Fed study confirms the burden nonworking immigrants place on the economy. Employment of illegal aliens in the housing industry did not increase overall output, while the immigrants and their families intensified the demand for housing, the study states: “We find that unauthorized immigrant worker flows increased local house prices and rents, without significantly expanding new housing supply.”

Working Americans end up paying for it all, of course. “In sum native working-class renters faced decreasing wages as illegal aliens flooded into the job market, and they also took the brunt of the housing cost increase as demand for apartments and multi-family housing grew,” the Fed study states.

With illegal immigration causing approximately 30 percent of the rise in housing prices during the Biden years, and legal immigration applying additional upward pressure, however, at least four-tenths of the increase must result from other factors.

Greatest among these are overall price inflation caused by excessive federal spending, higher interest rates caused by expanding federal debt payments, and exceedingly tight government regulation at all levels suppressing urgently needed increases in the housing supply while raising costs of fuel and other necessities.

All of those government actions have severely diminished the well-being of the American people.

This was predictable and unnecessary. Mass immigration advocates regularly promise that immigration will benefit the country by providing much-needed workers who will do the jobs Americans won’t. Immigration cheerleaders downplay and suppress any discussion of demand-side effects, of what the immigrants consume, except through the old lie that a greater demand for goods and services will magically result in higher production to meet it.

The expected higher production didn’t happen during the Biden immigration surge, as the Fed analysts’ data on the housing supply demonstrate. Instead, the immigration surge amplified inflation and interest rate increases, pushed up housing prices by raising demand, and failed to improve the housing supply.

The Federal Reserve analysts are doing the public a big favor by identifying some of the real costs of the American people’s kindness and generosity. Mass immigration looks like harmless altruism until millions of people get hurt by an absolutely unnecessary affordability crisis.