Republican Sen. JD Vance recently made claims suggesting that the housing affordability crisis in the US has been exacerbated by the influx of illegal immigrants competing for homes. However, experts point to a more complex set of factors contributing to the issue.
The housing affordability crisis is primarily driven by a severe lack of inventory, which has been further worsened by trends stemming from the pandemic, such as remote work and historically low interest rates.
In a policy essay, Minneapolis Federal Reserve President Neel Kashkari highlighted the uncertain long-term impact of increased immigration on inflation and housing. While immigrants do contribute to housing demand, the specific impact of undocumented immigrants is less significant than often portrayed.
Recent data from the Urban Institute revealed that in 2023, only a small fraction of mortgages (5,000 to 6,000) were issued to individuals holding Individual Tax Identification numbers (ITINs), commonly used by those not authorized to work in the US. This group represented just 0.1% of all first mortgages originated that year.
It is important to note that the narrative linking undocumented immigrants to the housing affordability crisis may be oversimplified. While immigrants do add to housing demand, the overall impact is relatively minor compared to other factors at play in the housing market.
