Is the AI boom about to come for homebuyers’ jobs?
Major employers across the US are cutting workers and planning to shed more as artificial intelligence (AI) adoption ramps up, a trend that could have major implications for the national housing and mortgage markets.
Amazon, Salesforce, and Palantir are just some of the companies to trim their workforces this year, citing the growth of AI as a reason for that pivot. Outplacement company Challenger, Gray & Christmas said AI was cited as the main factor behind over 48,000 job cuts in 2025 – the majority of those occurring in October.
So far, AI-induced layoffs have barely caused a ripple in the housing market, with elevated borrowing costs and stubbornly high home prices viewed as the biggest challenges to the market’s health.
But a wipeout of white-collar jobs would eventually have an enormous impact on the national housing and mortgage outlooks, according to California-based mortgage broker-owner Amir Nurani (pictured top) of Left Coast Leaders.
“I think the biggest risk in the market is not interest rates and not affordability. It’s AI,” he told Mortgage Professional America. “AI is eliminating entry-level jobs and you’re seeing that all over the headlines with college grads coming out and not being able to find placement in the job market.
“If you look at a corporate tree and you’ve got CEO at the top and you have your entry-level employees at the bottom, AI is [currently] going after the entry-level positions, going after the rudimentary tasks with the highest cost basis.”
That alone isn’t a major risk for the housing market; after all, most younger Americans working entry-level jobs aren’t likely in a position yet to purchase a home anyway.
Still, in the long run, as AI gnaws at jobs higher up the chain, mass layoffs will affect a prime cohort of potential American homebuyers, Nurani said, and potentially weigh against the housing market.
“If you take a step back and look at it, what percentage of entry-level employees are out there buying homes? I don’t think you see a whole lot there,” he said. “And so I don’t think the cannibalism that’s occurring at the bottom end of the corporate tree is going to be impacting housing adversely in the short run.
“But what I do think is that AI is going to start making its way up the tree. And when it starts hitting mid-level management, supervisory roles, higher-paying jobs – at that point, I think it could trigger a housing slowdown.”
Potential wave of layoffs would likely be different from COVID
The US economy lost millions of jobs at the onset of the COVID-19 pandemic, far more than employers have cut to date because of AI. But there’s a key difference: those jobs eventually returned, and many were temporary layoffs or furloughs as companies waited out the end of public health restrictions.
“The difference in AI is that it’s not going to be a disruptor at such a fast pace as COVID,” Nurani said. “Overnight, people were losing their jobs. Even mortgage guidelines changed to make sure that somebody was still employed within 10 days of their loan funding.
“Those types of checks got removed from the market because as the COVID stuff died off, that wasn’t as much of a risk anymore. And guess what? Those jobs, they did in fact return to the market. But when you’re looking at AI, the scary part about this is that those jobs aren’t coming back.”
Don’t expect AI to cause a years-long housing market slump
That shift might not be overnight, but it could arrive sooner than many think. A recent Massachusetts Institute of Technology (MIT) study argued that AI can already replace nearly 12% of the US workforce, potentially affecting over $1 trillion of wages in finance, professional services, and healthcare.
But while layoffs might cause an initial dip in housing market activity, the AI boom will also create new jobs and ultimately bring the market back on even footing, Nurani said.
“I think it’s going to take time, but in about a two-year period I think you’ll see the bulk of the adverse impact that’s going to occur from AI,” he said. “And then also during those two years, you’ll see new industries emerge.
“But I think you’ve got to fully experience the pain first before all these new industries start to pop up. I think it’s going to be a two-year cycle.”
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