JD Vance Claims 'Illegal Immigrants' Prevent Home Ownership
This article presents a compelling argument ahead of the election by combining two significant issues for voters: skyrocketing housing costs and an influx of undocumented immigration.
TroibNews 
Sen. JD Vance is making headlines for his assertion that undocumented immigration is “one of the most significant drivers of home prices in the country.” During the vice presidential debate, he stated, “You’ve got housing that is totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes.”
While Vance’s claim may be an exaggeration, it does highlight a relevant issue. Research indicates that immigrants contribute to increased demand for housing, exacerbating supply shortages and driving up prices. However, there are larger forces at play in the affordability crisis, notably the historically low construction levels following the 2008 financial meltdown.
Vance’s argument holds particular weight just weeks ahead of the election, as it intersects with two major concerns for American voters: skyrocketing housing costs and the influx of undocumented immigration in recent years. Jason Furman, a former top economic adviser to President Barack Obama, noted, “If you don’t like immigration you make any argument against it you can. In the past it was, ‘They’re going to bring down the value of your home,’ even though there wasn’t a lot of evidence to support that. Now the problem is, ‘They’re driving up the value of the home you want to buy, so they’re bad.’” He clarified, “Immigrants do actually drive up the value of houses, but it’s also the case that it only explains a small fraction of the increase we’ve seen in recent years.”
Vance’s stance echoes sentiments shared by others, including former President Donald Trump and Republican lawmakers like Rep. Glenn Grothman, who also emphasize immigration as a key factor behind the nearly 50 percent rise in home prices over the last four and a half years. Trump has promised to prohibit undocumented immigrants from obtaining mortgages, and some Federal Reserve officials have connected immigrant demand to rising prices. While Fed Chair Jerome Powell downplayed the correlation in a July hearing, he acknowledged that there could be localized impacts.
The logic connects demand with supply issues, but the direct correlation is not straightforward. Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies, asserted, “While immigrants do add to overall housing demand, they cannot be blamed for the recent surge in home prices and rents that took off in 2020 and 2021, as immigration reached its lowest levels in decades due to the pandemic.” He elaborated, “Immigration started to surge in 2022 and peaked in 2023, even as growth in home prices and rents slowed dramatically. Trends in interest rates and the pandemic-induced demand for housing were mostly responsible for the recent trends in housing costs.”
Moreover, a significant proportion of recent immigrants are renters rather than homebuyers. According to an analysis by the Center for Immigration Studies, 89.5 percent of households led by immigrants who arrived in the past two years reported being renters. Redfin Chief Economist Daryl Fairweather pointed out, “These undocumented immigrants are not the people who are buying homes. You need a lender to lend you money, you need documentation, you need credit checks to buy a home … Perhaps you could argue that they have an impact on the rental market, but they are more likely to live in overcrowded housing, to seek out family members who already have a home and double up.”
Immigrants typically take time to establish new households, which leads to a delayed impact on housing demand, as per Moody’s Senior Economist Lu Chen. Chen, along with colleagues, recently highlighted that “in terms of housing demand, immigrants, particularly newcomers, make up a significant portion of renter households. A considerable reduction in this population could greatly reduce housing demand, predominantly impacting the multifamily market and putting downward pressure on rent.”
In 2022, approximately 11 million unauthorized immigrants were residing in the U.S., with that number continuing to rise. Vance mentioned "25 million illegal aliens" vying for homes, while Trump discussed plans to round them up and deport them.
This surge in immigration coincides with a significant shortfall in new-home construction over the last two decades, as reported by the National Association of Realtors in 2021, estimating a deficit of between 5.5 million and 6.8 million units. New construction only reached 2006 levels in 2021.
CIS Research Director Steven Camarota recently testified that since January 2021, 2.4 million new immigrant-headed households have formed, with possibly 1.4 million of that increase linked to illegal immigration. When Vance was questioned about economic research supporting his claims during a debate, he referred to a “Federal Reserve study.” Later, he tweeted a quote from Fed Governor Michelle Bowman, who stated that “given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize.” Additionally, Minneapolis Fed President Neel Kashkari noted that “immigrants … need a place to live, and their arrival in the U.S. has likely also increased demand for housing.”
Research from MIT Professor Albert Saiz indicates that “an immigration inflow equal to 1 percent of a city’s population is associated with increases in average rents and housing values of about 1 percent.” A recent working paper from the University of Texas at El Paso suggested that a similar rise in immigrant population correlates with a 7 percent increase in home price appreciation. However, Saiz counters that immigration “is not even close to explaining 95 percent of what’s [been] going on” in rental markets in the past few years. He explained, “Assuming that three million additional immigrants arrived in the last three years, that’s less than one percent of the U.S. population. If you look at it distributed equally it could explain one percent of rental growth nationally, not the 20 percent we’ve seen.”
It's important to note that immigrants also represent a critical component of the construction workforce, which is currently facing labor shortages. As outlined in the most recent American Community Survey, one in four construction workers is an immigrant, with the proportion rising to 31 percent in specific construction trades.
Fairweather summarized, “When economists talk about housing policy, they’re really talking about building enough supply to meet demand. I’ve just never encountered controlling population growth as a policy for making housing affordable. It’s pretty out there — it would cause a whole host of problems that have nothing to do with housing.”
Emily Johnson contributed to this report for TROIB News
While Vance’s claim may be an exaggeration, it does highlight a relevant issue. Research indicates that immigrants contribute to increased demand for housing, exacerbating supply shortages and driving up prices. However, there are larger forces at play in the affordability crisis, notably the historically low construction levels following the 2008 financial meltdown.
Vance’s argument holds particular weight just weeks ahead of the election, as it intersects with two major concerns for American voters: skyrocketing housing costs and the influx of undocumented immigration in recent years. Jason Furman, a former top economic adviser to President Barack Obama, noted, “If you don’t like immigration you make any argument against it you can. In the past it was, ‘They’re going to bring down the value of your home,’ even though there wasn’t a lot of evidence to support that. Now the problem is, ‘They’re driving up the value of the home you want to buy, so they’re bad.’” He clarified, “Immigrants do actually drive up the value of houses, but it’s also the case that it only explains a small fraction of the increase we’ve seen in recent years.”
Vance’s stance echoes sentiments shared by others, including former President Donald Trump and Republican lawmakers like Rep. Glenn Grothman, who also emphasize immigration as a key factor behind the nearly 50 percent rise in home prices over the last four and a half years. Trump has promised to prohibit undocumented immigrants from obtaining mortgages, and some Federal Reserve officials have connected immigrant demand to rising prices. While Fed Chair Jerome Powell downplayed the correlation in a July hearing, he acknowledged that there could be localized impacts.
The logic connects demand with supply issues, but the direct correlation is not straightforward. Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies, asserted, “While immigrants do add to overall housing demand, they cannot be blamed for the recent surge in home prices and rents that took off in 2020 and 2021, as immigration reached its lowest levels in decades due to the pandemic.” He elaborated, “Immigration started to surge in 2022 and peaked in 2023, even as growth in home prices and rents slowed dramatically. Trends in interest rates and the pandemic-induced demand for housing were mostly responsible for the recent trends in housing costs.”
Moreover, a significant proportion of recent immigrants are renters rather than homebuyers. According to an analysis by the Center for Immigration Studies, 89.5 percent of households led by immigrants who arrived in the past two years reported being renters. Redfin Chief Economist Daryl Fairweather pointed out, “These undocumented immigrants are not the people who are buying homes. You need a lender to lend you money, you need documentation, you need credit checks to buy a home … Perhaps you could argue that they have an impact on the rental market, but they are more likely to live in overcrowded housing, to seek out family members who already have a home and double up.”
Immigrants typically take time to establish new households, which leads to a delayed impact on housing demand, as per Moody’s Senior Economist Lu Chen. Chen, along with colleagues, recently highlighted that “in terms of housing demand, immigrants, particularly newcomers, make up a significant portion of renter households. A considerable reduction in this population could greatly reduce housing demand, predominantly impacting the multifamily market and putting downward pressure on rent.”
In 2022, approximately 11 million unauthorized immigrants were residing in the U.S., with that number continuing to rise. Vance mentioned "25 million illegal aliens" vying for homes, while Trump discussed plans to round them up and deport them.
This surge in immigration coincides with a significant shortfall in new-home construction over the last two decades, as reported by the National Association of Realtors in 2021, estimating a deficit of between 5.5 million and 6.8 million units. New construction only reached 2006 levels in 2021.
CIS Research Director Steven Camarota recently testified that since January 2021, 2.4 million new immigrant-headed households have formed, with possibly 1.4 million of that increase linked to illegal immigration. When Vance was questioned about economic research supporting his claims during a debate, he referred to a “Federal Reserve study.” Later, he tweeted a quote from Fed Governor Michelle Bowman, who stated that “given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize.” Additionally, Minneapolis Fed President Neel Kashkari noted that “immigrants … need a place to live, and their arrival in the U.S. has likely also increased demand for housing.”
Research from MIT Professor Albert Saiz indicates that “an immigration inflow equal to 1 percent of a city’s population is associated with increases in average rents and housing values of about 1 percent.” A recent working paper from the University of Texas at El Paso suggested that a similar rise in immigrant population correlates with a 7 percent increase in home price appreciation. However, Saiz counters that immigration “is not even close to explaining 95 percent of what’s [been] going on” in rental markets in the past few years. He explained, “Assuming that three million additional immigrants arrived in the last three years, that’s less than one percent of the U.S. population. If you look at it distributed equally it could explain one percent of rental growth nationally, not the 20 percent we’ve seen.”
It's important to note that immigrants also represent a critical component of the construction workforce, which is currently facing labor shortages. As outlined in the most recent American Community Survey, one in four construction workers is an immigrant, with the proportion rising to 31 percent in specific construction trades.
Fairweather summarized, “When economists talk about housing policy, they’re really talking about building enough supply to meet demand. I’ve just never encountered controlling population growth as a policy for making housing affordable. It’s pretty out there — it would cause a whole host of problems that have nothing to do with housing.”
Emily Johnson contributed to this report for TROIB News
