Fed: Unauthorized Workers Drove 20% Rent Growth, 30% Home Price Surge

For the property technology sector, the linkage between immigration and housing costs has dual implications: rising rents and home prices drive consumer need for efficient property search, management, and financing tools—but aggressive immigration enforcement could shrink the construction labor pool, threatening new supply pipelines and increasing development timelines, pressures that proptech must navigate.

A working paper from the Federal Reserve Bank of Dallas has injected new data into the contentious debate over immigration and housing costs, estimating that the surge in unauthorized immigrant worker flows during the Biden administration accounted for roughly 30 percent of home price growth and 20 percent of rent growth in the average U.S. metro area. Released in early July 2026 and immediately amplified by President Trump, Press Secretary Karoline Leavitt, and Housing Secretary Scott Turner, the paper dovetails with a December 2025 HUD report showing a foreign‑born population increase of over 6 million—the largest on record—while former acting ICE Director Jonathan Fahey invoked “over ten million people” entering illegally, asserting that “rents and home prices went up because of illegal immigration.”

The economic logic is straightforward: a sudden demand shock in housing, without an immediate supply response, bids up both purchase prices and rents. The paper’s estimates suggest that in the average metro area, unauthorized workers contributed as heavily to employment growth (30 percent) as they did to home price appreciation, underscoring the broad labor-market footprint of this demographic shift. HUD Secretary Turner went further, claiming that “100 percent of the rental growth in New York and California is due to illegal aliens coming into our country,” though the working paper itself attributes a partial—not total—effect.

For markets, the working paper adds empirical weight to the Trump administration’s policy linkage between border enforcement and housing affordability, a narrative that could influence the upcoming election cycle and shape federal housing policy. If the estimates withstand peer review, they may bolster arguments for stricter immigration controls, with potential secondary effects on labor supply in construction, hospitality, and agriculture—sectors that are heavily reliant on immigrant labor. A crackdown could reduce the availability of construction workers just as the nation faces a persistent housing shortage, potentially raising building costs and slowing new supply, paradoxically making housing even less affordable.