We study the effect of immigration on home values in the U.S. Applying a county-level instrument for immigration, we find that immigration increases local house price appreciation and decreases its within-county spatial dispersion. Our estimates suggest that, on average, a one percentage point in- crease in the immigrant share of the local population raises house price appreciation by approximately 7 percent and reduces the dispersion of housing return within a county by about 1.5 percentage points. We also show that such effects are strikingly heterogeneous across counties and appear to be deter- mined by local culture. Using several proxies for attitudes toward immigration at the county level, we find that immigration boosts housing returns and limits its spatial dispersion only in counties with residents who are younger, more educated, and less racially biased. Our findings highlight that the effect of immigration on home values (or the lack thereof) is highly contingent on natives’ attitudes toward immigrants.

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