Illegal Immigration Added to Housing Cost Surge

The historic surge in unauthorized immigration into the United States contributed significantly to rising housing costs between 2021 and 2024, according to new Federal Reserve research, with New York among the states confronting intense housing and shelter pressures during the migration wave.

A Federal Reserve Bank of Dallas working paper estimates that unauthorized immigration accounted for about 30% of total home-price growth and approximately 20% of rent growth in the average metropolitan area during the period. Researchers estimate the immigration surge itself pushed home prices about 6.6% higher and rents 4.3% higher.

Economists Daniel J. Wilson and Xiaoqing Zhou examined the unprecedented increase in unauthorized immigration from early 2021 through early 2024. Their research found that the influx increased both home prices and rents without producing a significant expansion in housing supply, effectively creating additional demand in markets where housing could not quickly expand.

The issue was particularly visible in New York, which was already struggling with some of the nation’s highest housing costs and a shortage of affordable units.

New York State Comptroller Thomas DiNapoli reported that homelessness across the state more than doubled between January 2022 and January 2024. The number increased 53.1% in the final year alone, more than four times the increase in the rest of the country. DiNapoli said the sharp increase was driven largely by New York City and the influx of asylum seekers, although housing insecurity also increased elsewhere in the state.

New York City accounted for 93% of the statewide increase in homelessness during that period. In January 2024, 89,119 people were living in city Department of Homeless Services shelters, including 34,057 asylum seekers. Across the city’s various shelter systems, approximately 68,000 asylum seekers were being housed at the time. Outside New York City, Long Island had the largest homeless population in the state.

The migration wave also imposed billions of dollars in government costs. New York City recorded asylum-seeker expenditures of $1.47 billion in fiscal 2023, $3.75 billion in 2024 and $3.02 billion in 2025. Through June 2026, New York State itself had spent $2.68 billion on its emergency response, according to the state comptroller. Emergency shelter represented the city’s largest cumulative expense.

The New York statistics do not establish how much immigration specifically increased home prices or rents in the state, and asylum seekers are not necessarily part of the unauthorized population measured by the Federal Reserve researchers. They do, however, demonstrate the scale of additional demand placed on New York’s housing and shelter systems during the same period.

The Dallas Fed findings indicate immigration was a measurable contributor rather than the sole cause of the affordability crisis. Housing shortages, inflation, construction costs, zoning restrictions and elevated mortgage rates also squeezed buyers and renters, while millions of additional residents added demand to a housing supply already struggling to keep pace.