Date of Completion
2025
Document Type
Honors College Thesis
Department
Economics
Thesis Type
Honors College
First Advisor
Richard Sicotte
Keywords
immigration, rents, house prices, shift-share, decomposition
Abstract
This study investigates the impact of foreign immigration on rental rates and owner-occupied house prices in metropolitan areas in the United States. Using a panel dataset that covers 381 American metropolitan areas from 2013 to 2022, I demonstrate that immigration may have a significantly positive short-term effect on housing prices. After implementing a version of the classic shift-share instrument to control for the endogeneity of immigration and housing costs, I find that a 1% increase in immigrant concentration as a proportion of total metropolitan area population leads to about a 2% increase in rental rates and a 3% increase in house prices. However, when I decompose the total effect of immigration on housing costs into the effect solely due to increases in immigrant demand and the effect due to induced native migration, I discover that only 18.4% of the total effect on housing costs can be attributed to direct demand from immigrant inflow. Lastly, I find that the impact of immigration on house prices is significantly higher at the upper end of the house price distribution.
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Recommended Citation
Pulaski, Luke, "Immigration, Rents, and House Prices in American Metropolitan Areas" (2025). UVM Patrick Leahy Honors College Senior Theses. 748.
https://scholarworks.uvm.edu/hcoltheses/748