Vance says immigrants caused a housing shortage. Economists disagree.

That claim has been debunked by economists and housing experts, who say that other forces have played a much bigger role in driving up prices and that illegal immigration is not a top reason prices are high. Immigration may be helping to keep rents elevated in some areas, though.

Foreign-born workers also make up roughly a third of the construction workforce, a crucial part of the push to build millions of new homes and fix years-long shortages. That means the strict immigration crackdown Vance and former president Donald Trump are proposing could send prices even higher.

“I don’t think [new immigrants] are demanding the same type of dwellings that are pulling up prices,” said Dany Bahar, an economist at Brown University and nonresident senior fellow at the Brookings Institution. “These people are not competing for the same households as middle-class Americans.”

Immigration has undoubtedly changed the U.S. economy, especially since the pandemic. About 50 percent of the labor market’s extraordinary recent growth came from foreign-born workers between January 2023 and January 2024, according to an Economic Policy Institute analysis of federal data. Before that, by the middle of 2022, the foreign-born labor force had grown so fast that it closed the gap created by the pandemic, according to research from the San Francisco Fed.

In February, estimates from the Congressional Budget Office said the U.S. labor force will increase by 5.2 million people by 2033, thanks especially to net immigration. The economy is projected to grow by $7 trillion more over the next decade than it would have without new influxes of immigrants, according to the CBO.

A larger population, in turn, creates more demand for housing and other services. CBO research from July noted that higher immigration raises state and local governments’ spending — particularly on education, health care and housing — more than it increases their revenue.

Yet housing options for new immigrants, including many undocumented workers in lower-wage jobs, are often distinct from the broader market that native-born workers deal with. Mark Zandi, chief economist at Moody’s Analytics, noted that many new immigrants come to the United States with few financial resources and little income. They often double- or triple-up with friends or family in a single home. They are also far less likely to be able to buy a home, which can require a sizable down payment and enough credit history to get a mortgage.

That can mean more pressure for the rental market, where affordability issues are also front and center.

In testimony before Congress last month, Steven A. Camarota, director of research for the conservative Center for Immigration Studies, tied the post-pandemic run-up in rental costs to the growing number of immigrant renters.

“This is certainly consistent with the possibility that immigration, including illegal immigration, has significantly increased housing prices in areas of heavy immigrant settlement,” Camarota said.

Yet it’s not clear exactly how much immigration has influenced the overall rental market.

Rent costs shot up in 2021 and 2022 on the heels of the pandemic, as people reconsidered where they wanted to live and suddenly competed for the same units. But new leases have since stabilized considerably, and rates are even falling in some cities. On average, apartments are slightly cheaper today than they were one year ago, according to Apartment List’s rental tracker, and have stayed in the red for months.

During the debate, Vance alluded to what he said was a Federal Reserve study that “really drills down on the connection between increased levels of migration, especially illegal immigration, and higher housing prices.” After the debate, he posted a May 2024 speech by Fed Governor Michelle Bowman in which she seemed a bit less certain, saying, “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.”

Vance seemed to be referring to the for-sale market, which has been in the throes of a different kind of upheaval. When the Fed slashed interest rates to near zero at the beginning of the pandemic, mortgage rates fell, meaning scores of home buyers locked in rates around 3 or 4 percent. Then, rates went on an upward tear as the Fed hoisted borrowing costs to tame inflation, peaking around 8 percent last fall.

The result: Millions of homeowners who might otherwise have sold their homes stayed put to keep their low mortgages. That “lock-in” effect could soon start to undo itself, as interest rates drop. But that may also inject more demand into the market, making it harder for lower-income and first-time buyers to get in.

The Trump campaign did not immediately respond to a request for comment on Vance’s remarks.

Zoomed out, experts broadly agree that the country needs more housing. Vice President Kamala Harris says she wants to help build 3 million new homes, give state and local governments incentives to invest in housing, and create a multibillion-dollar tax credit program to make affordable projects pencil out for builders. The campaign has also promoted a $25,000 assistance plan to help first-time buyers.

Some economists have criticized those plans as having the potential to juice demand and drive prices up, though.

During the debate, Walz said that “we can’t blame immigrants for the only reason” housing has become unaffordable.

“The fact of the matter is that we don’t have enough naturally affordable housing. But we can make sure that the government’s there to help kick-start it,” Walz said.

White House Council of Economic Advisers Chair Jared Bernstein said Vance doesn’t understand the housing market, telling The Washington Post, “If you get the diagnosis wrong, as Vance did, you’ll never solve the problem.”

Housing policy doesn’t just fall to the federal government — it’s more like a tangled web of state and local laws, including zoning. But building new homes requires workers.

Trump’s proposals to deport millions of undocumented immigrants — which would be exceedingly difficult to carry out — would bring major consequences for the construction industry and the overall housing market if he succeeds. In a widely cited February paper, researchers at the University of Utah and the University of Wisconsin found that higher immigration enforcement reduced the number of construction workers and led to less home building and higher home prices. The paper also found that “undocumented labor is a complement to domestic labor,” and that deporting undocumented construction workers also cut back on the labor supplied by domestic workers.