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While immigration has been used as a talking point by some politicians when discussing the United States housing market, research from the Joint Center for Housing Studies at Harvard University shows that price growth predates a recent surge in immigration.

Additional foreign-born householders increased by over 2 million between 2019-2023 while the number of additional native-born households increased by over 6 million. As a result, 16 percent of all households (21 million) were headed by an immigrant in 2023.

Also while immigration surged in recent years with the Congressional Budget Office estimating that 3.3 million people immigrated to the United States in 2023, the surge doesn’t line up with the increase in housing affordability issues. Home prices surged in both 2020 and 2021, and rents reversed a slight drop in 2020 with a sharp increase in 2021 according to the research from the JCHS. After immigration ramped up in 2022, growth rates of house prices and rents slowed and by 2023, as the surge in immigration continued, home price growth continued to fall while rent growth completely stalled.

The research then credits a large millennial generation (those born between 1980-1994) being at a prime homebuying age (26-40) for the rise in housing cost. The JCHS also credits the interest rate environment as low interest rates during the pandemic drove demand.

“The heightened demand from these factors quickly clashed with the country’s constrained housing supply, which remained at insufficient levels after years of underproduction following the Great Recession,” the research stated. “These forces combined to put enormous pressure on home prices as well as rents, as the growing number of renter households competed for limited rental stock.”

Additionally, while immigrants add to housing demand, they also help expand the supply of homes given their role in the construction industry. Immigrants accounted for 34 percent of those who worked in construction trades in 2023, far higher than their 18 percent share of the overall workforce, according to ACS data.

“In the long term, population and labor force growth are key drivers of a healthy economy and expanding economic opportunity,” the research states. “However, given the aging of the historically large baby boom generation and the declining birth rate, natural population change (births minus deaths) in the United States is projected to become negative by 2040. At that point, the country will be wholly dependent on immigration for population growth. While the recent surge in immigration is difficult to absorb in the short term, immigrants are and will continue to be an important source of future economic growth. Absent immigration, household growth will slow markedly over the next decade, significantly dragging down economic growth, as our forthcoming household projections will show.”