Former acting U.S. Immigration and Customs Enforcement Director Jonathan Fahey stated that former President Joe Biden’s immigration policies contributed to higher housing costs for Americans, citing a Federal Reserve Bank of Dallas working paper. The paper links the surge in unauthorized immigration between 2021 and 2024 to rising home prices and rents. Fahey made these remarks during an interview on Fox Business following the July 4 holiday weekend, arguing that the increase in immigration placed additional pressure on an already strained housing market.

The Dallas Fed working paper examined how the unprecedented rise in unauthorized immigration affected local labor and housing markets by combining immigration court records with government administrative data. The authors cautioned that the paper is a preliminary draft released for professional review and does not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.

Fahey contended that bringing millions of people into the country increased demand for homes, healthcare, and other services without a corresponding increase in supply. "The American people overall are the losers on illegal migration," Fahey said. These comments come as housing affordability remains a significant concern, with a recent BofA Securities housing report noting elevated home prices and higher construction costs continue to weigh on buyers.

The study found that a 1% increase in unauthorized workers relative to a local labor force was associated with roughly a 1% increase in overall employment. It also linked the population increase to an estimated 2.2% rise in home prices and a 1.4% increase in rents, reflecting additional housing demand. However, the researchers stated they found no evidence that the immigration surge reduced average wages.

Impact on Housing Market

The debate over immigration's economic impact continues as immigration remains a central policy focus during President Donald Trump’s second term. Last month, Trump nominated former Oklahoma state trooper and U.S. Marine Lance Schroyer to lead U.S. Immigration and Customs Enforcement as the agency prepares for a broader expansion of enforcement operations. Fahey argued that the Trump administration’s approach prioritizes protecting American workers by reducing illegal immigration.

Wall Street financier Steve Rattner stated on Monday that the US manufacturing sector shed approximately 113,000 jobs between November 2024 and June 2026, despite the implementation of tariff policies designed to re-shore industry. During the same period, the education and health services sector added about 1.1 million jobs, accounting for the vast majority of employment gains. Rattner shared data from the U.S. Bureau of Labor Statistics indicating that the administration's strategy to shift production back to the country has not yet yielded manufacturing employment growth.

Sector Employment Trends

The divergence in sector performance highlights a specific weakness in the labor market. While health care and education have driven growth, manufacturing has faced persistent headwinds.

Since returning to office, President Donald Trump has expanded tariffs on a range of imported goods to encourage manufacturers to shift production, investment, and hiring back to the US. However, the data suggests these measures have not yet translated into net job creation within the factory sector.

Labor Market Cooling

The broader labor market showed signs of cooling in June. US employers added 57,000 jobs, a figure that fell well below economists' expectations. Additionally, payroll gains for April and May were revised lower by a combined 74,000 jobs. Manufacturing payrolls remained relatively unchanged during June, while health care continued to add jobs, though at a slower pace compared to recent months.

Outlook for Factory Jobs

Analysis from Wells Fargo suggests that a broad-based recovery in factory hiring faces significant obstacles. The bank cited higher labor costs, a shortage of skilled workers, and continued policy uncertainty as primary factors hindering growth. Sarah House, a senior economist at Wells Fargo, noted that a meaningful increase in factory jobs does not appear likely in the foreseeable future. She added that uncertainty surrounding government policy could discourage companies from making long-term hiring decisions.