Dallas Fed Study: Unauthorized Immigration Added 6.6% to Home Prices

A working paper from the Federal Reserve Bank of Dallas, authored by economists Daniel J. Wilson and Xiaoqing Zhou, concluded that unauthorized immigration into the United States between 2021 and 2024 pushed home prices up by 6.6% and rents up by 4.3% in the average metro market. The 65-page preliminary draft frames the surge in undocumented arrivals during that period as a "housing demand shock" hitting a market where supply simply couldn't respond fast enough.

The figure circulating in political conversations—30%—is real but often misread. Unauthorized immigration didn't cause a 30% price increase. It accounted for roughly 30% of the total home price growth that occurred from 2021 to 2024, during which overall home prices rose 22.4% and rents climbed 22.6%. The other 70% of that run-up came from other forces: pandemic-era demand shifts, low mortgage rates, remote-work migration, and chronically underbuilt inventory.

What the Economics Actually Show

Wilson and Zhou found that when undocumented workers entered a local labor market equal to 1% of that area's existing workforce, home prices climbed 2.2% and rents rose 1.4%. At the national scale, an inflow of roughly 7 million undocumented immigrants over the study period created enough housing demand to move prices in statistically significant ways—without, the authors note, causing meaningful wage declines in those same labor markets.

The rent side of the equation is worth pausing on. Unauthorized immigrants are far more likely to rent than to buy, yet home prices rose more sharply than rents under this demand pressure—4.3% versus 6.6%. Jake Krimmel, senior economist at Realtor.com, offered a plausible explanation: immigration expands local labor markets and lifts incomes broadly, which in turn pushes up demand for owned homes. In other words, the effect on for-sale prices is partly indirect, running through employment and wages rather than immigrants directly competing for deed-recorded properties.

The paper carries a standard Federal Reserve disclaimer: it is a preliminary draft, and the views belong to the authors, not to the Dallas Fed as an institution.

Why Supply Is the Underlying Story

Krimmel's broader read of the study is that short-run immigration flows—up or down—are only one variable in a housing market that was already stretched. Because the study window was just three years, home construction never had a realistic chance to absorb the added demand. Over a longer horizon, he argues, the price effect could shrink as supply eventually responds.

That supply-response argument matters right now. Deportation enforcement has accelerated significantly since early 2025. If unauthorized immigration contributed meaningfully to demand, a sustained reduction in that population could, over time, exert modest downward pressure on prices in metros that were most affected. But "over time" is doing a lot of work in that sentence. The Dallas Fed data covers years, not months, and local market conditions—job growth, new construction starts, interest rates—dwarf any single demand variable.

What This Means for Texas Sellers Pricing Today

Texas metros absorbed a disproportionate share of immigration-driven population growth during the study period. Dallas-Fort Worth, Houston, San Antonio, and Austin all saw significant labor-market expansion tied to new arrivals, both authorized and unauthorized. If Wilson and Zhou's framework holds, that demand tailwind helped inflate prices in those markets—which is good news if you bought before 2021 and are selling now, because you likely captured appreciation that had multiple drivers working in your favor.

The practical pricing question for a Texas seller in mid-2026 is different: that particular demand wave has already been priced in. You're not selling into the 2021–2024 run-up; you're selling into whatever equilibrium the market finds after it. Supply in most major Texas metros has expanded since 2022, putting more competitive pressure on sellers than existed during the tight-inventory years the study covers.

That means price your home on current absorption data, not on peak-cycle comps. Buyers in 2026 have more choices than they did in 2022, and they know it. Sellers who anchor their ask to 2021–2023 sale prices without accounting for added inventory are sitting longer and cutting later—a two-step that costs more than pricing correctly at the outset.

On timeline: if you're planning to list in the next 60 to 90 days, watch local days-on-market figures closely. In metros where new-home construction has been aggressive—parts of the DFW suburbs, the Houston outer ring, San Antonio's growth corridors—supply is meaningfully softer than it was during the demand-shock years the study describes. That's not a reason to wait, but it is a reason to prepare your home and your pricing strategy more carefully than sellers needed to in 2022.

On net proceeds: the 6.6% price lift the study attributes to immigration-era demand is essentially embedded in your current equity position if you've owned for three or more years. What you do or don't realize from that gain depends on how efficiently you execute the sale now—list price, condition, timing, and negotiation. If you want a baseline number before you commit to a strategy, an instant-offer estimate can anchor you to today's market rather than yesterday's headlines.