Immigration Slowdown To Sharply Reduce Renter Household Growth, Study Says

The clampdown on immigration has slowed the nation's population growth. Now, Harvard estimates it is also slowing the formation of new households in the United States.

Harvard's Joint Center for Housing Studies estimates that immigration policy means 500,000 fewer households formed in the country each year from 2024 to 2027. Those 2 million households are mainly renters, but over time become homebuyers, Harvard said.

President Donald Trump's immigration crackdown has broad implications for the national housing market. People coming into the country on work and student visas are a major contributor to rental demand. Homebuilders rely on a significant immigrant workforce, and crackdowns have contributed to worsening builder sentiment.

Harvard researcher Daniel McCue said this marks a sharp turn from the 571,000 net new-renter households formed by immigrants who entered the country from 2022 to 2024 under President Joe Biden. At least one Fed study indicated illegal immigration may have driven up housing costs during the Biden administration.

Instead, McCue projected immigrants would account for just 132,000 new household formations by 2027.

This is based on the U.S. Census Bureau's most recent housing vacancy survey, which showed a marked increase in rental vacancy and a slowdown in new household formation overall. The national rental vacancy rate bumped from 7.1% in the third quarter of 2025 to 7.6% in the same time this year.

"This may be a sign that the sharp curtailment of immigration has begun to lower demand for rental units in a significant way," McCue said.

Housing market impact

Jiayi Xu, senior economist at Realtor.com®, says such a slowdown could spell trouble for the housing market over the long term.

"A significant slowdown in immigration growth would cause household growth to slow over the next decade, dragging down economic growth in the long term," Xu says.

Eric Finnigan, vice president of demographics research for John Burns Research and Consulting, says the shifting immigration policies of Biden and Trump have led to disruptions in the housing market. Immigration has been a central pillar of the nation's population growth, and falling birthrates haven't kept up.

"We knew at the beginning of the decade, given our demographic trends, that immigration would be important to economic growth," Finnigan says. "That includes housing demand, labor supply, and homebuyers and renters. We didn't plan for this sharp surge in immigration nor a sharp decline."

In the past, immigrant populations have been an important contributor to the housing market. Students and workers on visas routinely generate demand for new rental properties. In time, some of those renters eventually become buyers. But, Finnigan says, the whiplash of the policies of recent years could chill demand at a time when the housing market is seeing fewer buyers.

"The rules about their own visa could change overnight without any warning," Finnigan adds. "The last thing they want to do is plunk down a down payment on a home or be on the hook for an asset they want to leave at some point. They don't want to be with an asset they might have to leave without warning."