Immigration Slowdown To Sharply Reduce Renter Household Growth, Study Says

The recent restrictions on immigration have contributed to a slowdown in population growth across the United States, and a new study from Harvard indicates that this trend is also affecting the formation of new households. According to Harvard's Joint Center for Housing Studies, the current immigration policies are projected to result in the creation of 500,000 fewer households annually from 2024 to 2027. This totals approximately 2 million households that would primarily consist of renters, who often transition into homebuyers over time.

The implications of former President Donald Trump's stringent immigration policies are significant for the national housing market. Immigrants arriving in the U.S. on work and student visas play a crucial role in driving demand for rental properties. Additionally, the construction industry relies heavily on an immigrant workforce, and the tightening of immigration regulations has negatively impacted builder sentiment.

Daniel McCue, a researcher at Harvard, noted that this shift represents a stark contrast to the period from 2022 to 2024, during which approximately 571,000 net new renter households were established by immigrants under President Joe Biden's administration. Some studies from the Federal Reserve suggest that illegal immigration may have contributed to rising housing costs during this same period.

Looking ahead, McCue anticipates that the number of households formed by immigrants will dwindle to just 132,000 by 2027. This projection draws on data from the U.S. Census Bureau's latest housing vacancy survey, which has revealed an increase in rental vacancies and an overall slowdown in household formation. The national rental vacancy rate rose from 7.1% in the third quarter of 2025 to 7.6% during the same period this year.

"This may indicate that the significant reduction in immigration is beginning to substantially lower the demand for rental units," McCue explained.

Jiayi Xu, a senior economist at Realtor.com®, expressed concerns about how this slowdown could adversely affect the housing market in the long run. "A marked decrease in immigration growth would lead to a slowdown in household growth over the next decade, ultimately hindering long-term economic growth," Xu stated.

Eric Finnigan, vice president of demographics research at John Burns Research and Consulting, discussed how the changing immigration policies under both Biden and Trump have led to disruptions within the housing market. Immigration has historically been a vital component of population growth in the U.S., and declining birth rates have not compensated for this loss.