The current median price for a single-family home in America has surged to five times the median household income, causing panic among young people that the dream of homeownership may no longer be attainable.
There’s no single explanation for the spike, but there is one that’s been singled out by both President Donald Trump and Vice President JD Vance: the massive influx of illegal immigrants into the United States during the Biden administration, when the southern border was effectively left open. Estimates suggest that more than 10 million illegal immigrants were encountered under Biden.
“We … cannot ignore the impact that the flood of 21 million illegal aliens has had on driving up housing costs,” Trump said during a speech at the Economic Club of New York in September 2024. Vance brought the subject up again just this Thursday, saying that there could be as many as 30 million illegal immigrants in the United States “taking houses” from Americans.
“A lot of young people are saying, ‘Housing is way too expensive.’ Why is that? Because we flooded the country with 30 million illegal immigrants who are taking houses that ought to, by right, go to American citizens,” Vance said. “And at the same time, we weren’t building enough new houses to begin with, even for the population that we had.”
There are certainly multiple reasons that the Trump administration is forging ahead with its effort to carry out mass deportations, and the White House argues that one of the best ways to fix the housing market would be to address the illegal immigration crisis.
Many of the illegal immigrants in the United States move to city centers across the country when they enter, receiving government handouts and housing. The majority of illegal immigrants are pushed to find government shelters or cheap places to rent, given the difficulty of attaining a home without legal status in the country. Some of them, however, have been able to purchase American homes thanks to multiple mortgage companies agreeing to lend money to illegal immigrants without a social security number or green card, The Daily Wire uncovered earlier this year.
There is disagreement from economists and immigration experts on whether deporting the massive illegal population would have any measurable impact on the housing market at all. Norbert Michel, the vice president and director for the Cato Institute’s Center for Monetary and Financial Alternatives, said he believes “the idea that illegal immigration has something to do with it is absolutely insane.”
The libertarian organization’s expert said that it’s possible illegal immigrants could have minimal effects on housing markets in certain pockets of the country, but on the national level, he said it’s a non-factor.
“Do I think that’s a national-level problem? Absolutely not,” Michel said.
E.J. Antoni, the chief economist at the Heritage Foundation, agrees with Trump and Vance’s argument, saying it’s undeniable that such a large population would impact the market. He argues the mass deportation of illegal immigrants would have “the single biggest impact” on helping fix America’s housing problems.
“You can’t import over 10 million illegal aliens in a very short period of time and expect it not to have an impact on the real economy. Those people are all on the demand side of the housing equation. In other words, it’s 10 million additional people who now are looking for a place to live,” Antoni told The Daily Wire.
“This is econ 101: if you increase demand, you will increase price,” Antoni said.
Even though the vast majority of illegal immigrants are not technically in the market for owning a home, they still add pressure to the housing market. Increased demand for rental properties would increase lease prices and force more Americans to look at buying homes, Antoni argued.
“No matter which way you slice it, all of these people here increasing the demand for dwelling units is ultimately still going to have the effect of increasing the price of home ownership,” he said.
Studies have shown that illegal immigration can negatively affect the housing market.
Jason Richwine, a resident scholar at the Center for Immigration Studies, told The Daily Wire that researchers consistently find that high immigration, both legal and illegal, drives up housing costs “almost every time it’s studied.” One of the studies Richwine highlighted, from the Journal of Housing Economics, found that influxes in immigration “are associated with rising rents and prices,” especially in suburban areas.
“What they looked at was not only the impact on the given housing market where immigrants were coming to, but also the spillover effect. In other words, what happens to the price of housing in the areas just outside of the places where immigrants are coming to,” Richwine said. “What they found was that immigration raises the cost directly within the market immigrants arrive in, but even more so raises the cost around the area, with the idea being that people would prefer to live away from where the immigrants are coming to.”
Antoni acknowledges that there are other factors contributing to the housing market that are in the government’s control. He highlighted regulatory burdens placed on the housing industry by the government, which “makes it more difficult and more expensive to bring houses to market.”
A National Bureau of Economic Research study showed that construction of new homes is falling far behind the pace of previous generations. According to the study, “If the U.S. housing stock had expanded at the same rate from 2000-2020 as it did from 1980-2000, there would be 15 million more housing units.” From 2000 to 2020, while new home building was falling behind the pace of previous decades, illegal border crossings skyrocketed.
The libertarian Cato Institute, which generally opposes mass deportations, has argued that losing the illegal immigrant population may, in fact, increase housing costs because of how many of them work in construction.
The article, published by Cato last year in response to Vance’s comments about housing, agreed that illegal immigrants increase housing costs, but said the uptick in prices shouldn’t spark alarm or result in federal government action.
“Estimates show that about 30 percent of all construction workers are immigrants, with higher rates in California, Texas, Florida, New York, New Jersey, and Nevada. Deporting those workers or halting more immigrants will reduce the growth in the housing supply,” the author stated.
Antoni, the Heritage Foundation’s chief economist, disagreed with that argument.
“At the same time you have this massive influx of illegal aliens, you did not see a corresponding increase in home construction,” he said. “It was not as if all of these illegal aliens coming across the border suddenly caused a surge in the construction of new dwellings. That simply did not happen.”
Michel doesn’t just believe that illegal immigration has little to no effect on the housing market; he also rejects the premise that there’s a “housing crisis” to be fixed.
“I reject the crisis narrative from the beginning,” Michel said. “If you look at median annual housing costs as a percentage of income, it’s been pretty flat for quite a while. It’s almost exactly what it was in 2011. If you want to say there was a big bump during COVID, that’s true, but it’s come back down to the pre-pandemic level if you look at prices as a percentage of income.”
Michel pointed to some data to back up his argument. As of 2023, renters and first-time homebuyers were paying roughly the same percentage of their annual income on housing that they were in 2011. “It’s pretty hard to call that a crisis,” Michel said.
The cost of housing will almost certainly remain a topic of political debate for months as Republicans and Democrats prepare for the 2026 midterm elections. Nearly every young American — 97% of Gen-Z and 93% of Millennials — says they want to buy a home one day, and a staggering 84% of the younger generation say they’re delaying major life milestones like getting married or having kids until they can do so, according to a Coldwell Banker report.
Convincing Americans that Trump’s immigration crackdown will benefit them could be a key factor in how Americans view the president’s economic record when voters go to the polls again.