The Cato Institute, a think tank known for its advocacy of open borders, has acknowledged that Senator J.D. Vance (R-OH) is correct when he states that “immigration increases housing prices” for Americans. During the vice presidential debate on Tuesday evening, Vance blamed Vice President Kamala Harris for letting in millions of undocumented immigrants, which he argued contributes to higher home costs. The Cato Institute’s Alex Nowrasteh published a piece admitting that high levels of immigration do indeed raise housing prices due to increased demand for homes.
According to Nowrasteh’s analysis, supply and demand dynamics in the housing market determine prices. When there is an upward-sloping housing supply curve, additional demand from immigrants can push up prices. This makes sense as immigrants, like all people, seek shelter. In Springfield, Ohio, where Vance began his political career, home prices have risen as more Haitian migrants have arrived in the area. From August 2019 to August 2024, the median sale price of a single-family home increased by 101% in nominal terms, while the national increase was only 46% during the same period. This has made life more difficult for renters and first-time home buyers in Springfield but benefited existing homeowners, who are predominantly native-born individuals.
Data from a recent House Oversight Committee hearing reveals that a 5-percentage point increase in the proportion of recent immigrants within a metropolitan area’s population is associated with a 12% rise in average U.S.-born household rent relative to their income. This highlights how high levels of immigration can significantly affect housing prices, particularly when it comes to rental properties. The Census Bureau reports that the increase in rents during 2023 was the largest in the past decade.
Despite the acknowledged impact of immigration on housing prices, it is essential to recognize the broader economic and social implications of migration. While some Americans may face increased costs of living due to higher home prices, immigrants also contribute significantly to the economy through their work, entrepreneurship, and tax payments. Balancing these factors will be crucial for policymakers as they navigate the complex relationship between immigration, housing, and overall quality of life in the United States.