High housing costs are a serious pain point for millions of Americans, with many shut out of the real estate market by record-high home prices and others plagued by spiraling rents. During Tuesday’s vice presidential debate, Sen. JD Vance pointed to what he views as a major cause of the affordability crisis: immigration. 

“[Y]ou have got housing that is totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes,” Vance said in the debate with his Democratic rival and Vice President Kamala Harris’ running mate, Minnesota Gov. Tim Walz. 

Specifically, Vance pointed to “a Federal Reserve study that we’re happy to share after the debate,” which he claimed “really drills down on the connection between increased levels of migration, especially illegal immigration and higher housing prices.”

On Wednesday, Vance posted some studies and speeches on social media to back up his claim, although the Federal Reserve “study” is, in fact, a short prepared speech by a Fed official who had pointed out that the “inflow of new immigrants to some geographic areas could result in upward pressure on rents.”

A problem from sea to shining sea

While that’s far from a rigorous analysis linking immigration to higher home prices, many economists who have studied the real estate market say the factors driving up home prices are structural, such a construction downturn following the 2007-09 Great Recession that’s led to a severe housing shortage. By contrast, the role of immigrants in driving up real estate prices isn’t as clear cut.

What is evident, however, is that home prices have surged 53% since January 2020, just prior to the pandemic, pushing many would-be homebuyers out of the market. And with rents soaring 25% over the same time period, half of all renters are now defined as “cost burdened.” That means a record share of renters now spend more than 30% of their income on housing, according to the Harvard Joint Center for Housing Studies.

“Many people imagined the affordability crisis was confined to larger cities, and that has really changed over the last few years — people all across the country are experiencing affordability issues,” Shamus Roller, executive director of the National Housing Law Project, an advocacy group for affordable housing, told CBS MoneyWatch. “It is driving the economic anxiety that many people are feeling across the country.”

What’s driving up home prices?

The causes behind skyrocketing housing costs stem chiefly from larger issues in the real estate market. The biggest factor: a longstanding lack of new construction in the decade that followed the U.S. housing crash in 2007, along with the ensuing global financial crisis. 

“The housing shortage is the root cause of our affordability crisis,” said Zillow chief economist Skylar Olsen in an email to CBS MoneyWatch. “The simple fact is there are not enough homes where and how they are needed in this country. That drives housing costs to outpace the typical household’s ability to pay.”

At the same time, the millennial generation has reached the prime age for buying their first homes, driving up housing demand. Yet baby boomers are still largely in their own houses, contributing to the supply crunch. One economist has even blamed boomers for the affordability crisis as the generation is divorcing and still creating new households, adding to the competition for real estate with millennials and younger Americans.

The pandemic, during which mortgage rates sank to record lows and many Americans shifted to remote work, also “sparked a home buying frenzy,” further constricting supplies and driving up home prices, Olsen said. 

“The surge in prices during the pandemic’s real estate boom was due to a confluence of trends that have little do with immigration, including ultra-low mortgage rates that made it more affordable for many to buy their first home,” she said. 

Still, there is some evidence that a rise in immigration can boost rental costs, though only slightly. For example, one 2017 study found that a 1% increase in a city’s population due to immigration results in an increase of 0.8% in rent prices — an increase, to be sure, but although a small one.

What’s the biggest thing that could lower home prices?

The greatest single remedy for soaring housing costs, both for buyers and renters, is to boost the country’s supply of available properties, experts say. That means more construction, which has been hampered in many cities and regions by regulations that have made it more difficult to build new homes and apartment buildings. 

As of 2022 the U.S. had a shortage of 4.5 million homes for sale relative to demand, up from 4.3 million the previous year, according to data from Zillow.

“It’s critical that we push forward policies that encourage and allow more construction,” Olsen said. “A comprehensive approach is needed, involving simplifying processes, reducing initial costs and making it easier for more and different types of homes to be built.”

Deporting millions of immigrants, as the Trump campaign is proposing, could actually worsen the housing shortage, Roller of the National Housing Law Project said. That’s because about 1 in 3 workers in the construction industry are immigrants, so deporting millions of them could cause major headwinds for builders.

During the vice presidential debate, Vance also pointed to the Trump campaign’s proposal to build new homes on some federal lands — an idea that the Biden administration is also championing. But Roller said such a plan raises serious questions, notably the geographic location of those lands and exactly how development would proceed. 

“Obviously when you think about using federal lands for housing, the details really matter and we have no details whatsoever,” Roller told CBS MoneyWatch. It could be “a parking lot in Los Angeles getting redeveloped, versus letting people develop in Yellowstone National Park.”