An open letter to the Wall Street Journal

Immigration Contributes to Increased Housing Demand

Illegal immigration is not the only factor in rising housing costs (“The Latest Housing Scapegoats,” July 8, 2026), or even the most significant factor, but the Dallas Fed working paper demonstrates a basic theory of economics: more people demanding homes without a corresponding increase in supply leads to higher home prices. Earlier research on legal immigration cited in the Dallas Fed paper found that an inflow equal to 1% of a city’s population raised rents by roughly 1% and home prices by even more.

The Dallas Fed working paper cites a 7 million-person increase – roughly the population of Massachusetts –  in the U.S. population from 2021 to 2024 attributed to unauthorized immigration. The U.S. housing shortfall is between 4 and 6 million homes. Basic economic principles tell us that the surge in illegal immigration had to push prices up – and the paper provides a measure. In the average metro area, illegal immigration accounted for 30% and 20% of the increases (not total costs) of home prices and rents, respectively.

The border crisis, the authors write, caused “a housing demand shock in the face of short-run inelastic supply.” We should demand better policy from both the legislative and executive branches, and it isn’t scapegoating to say so.