What Impact Does Immigration Have on the Housing Market?

Immigration levels have surged in recent years after a slowdown during the 2020 pandemic, with 2.7 million immigrants arriving in 2022 and 3.3 million in 2023. According to the Joint Center for Housing Studies of Harvard University, this increase is already affecting the housing market, but the full impact on household growth will take time to be fully realized. The effect depends on the headship rate, which is the percentage of adults heading their own households. In 2022, 34% of recent working-age immigrants were heads of their households, and this rate increases with time spent in the country. Immigrants who arrived between 2013 and 2017 had a 41% headship rate in 2022, while those in the U.S. for 20 years or more had a rate of 50%.

Another complication for estimating new households is the fact that many of the newly-arrived immigrants are asylum seekers, which has likely delayed or reduced their household formation because of ineligibility to work. The typical asylum process requires those awaiting a decision to apply for a work authorization, which they can receive no sooner than 180 days after their asylum claim was filed. This is important because the headship rate of recently-arrived immigrants in 2022 was 41 percent among employed working-age adults and 27 percent among unemployed working-age adults—and asylum seekers may be in an even more economically difficult situation due to the lack of networks or assets to help them maintain financial footing.

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