The U.S. housing market is a far cry from what it was in the post-war era. Back then, the median home price sat at about $7,300, or about $101,000 adjusted for inflation. Gen Z and Millennials are especially struggling to score the purchase that’s considered the heart of the American dream. The median first-time homebuyer bought their home at age 40 last year, up from the early 30s from just a decade ago. And now, prospective homebuyers are being walloped by a competing reality: an encroaching AI-driven “jobpocalypse,” which could push homeownership even further out of reach—or erase the prospect altogether.
“I think that AI and the potential for AI layoffs is a major part of that economic anxiety that’s holding people back from making a commitment to buying a home—even though it got more affordable to buy one,” Daryl Fairweather, Redfin’s chief economist, told Fortune.
A new survey of 4,000 U.S. residents conducted by Ipsos and commissioned by real-estate brokerage Redfin found that nearly 3 in 5 Americans (59%) think AI will eliminate jobs and make it even harder to afford homes. Not only do Americans have to contend with rising home costs, but they now have to fear the loss of their jobs due to AI—moving the goalposts even further from achieving the American dream.
The situation has grown dire for Gen Zers—so dire in fact that many parents of young adults have stepped in to help out with a down payment. With older generations holding the overwhelming majority of wealth in the U.S. today, one way we’re seeing the Great Wealth Transfer play out is with parents helping with housing costs and even prioritizing homeownership over college tuition, seeing it as the more transferable and tangible component of generational wealth.
AI’s impact on the housing market
Fairweather said negative attitudes around AI could actually be contributing to cold feet in the housing market. While mortgage rates have been elevated over the last few years, she said a recent dip in rates should’ve led to an increase in home purchases. But that was not the case, something she attributes to economic anxiety driven by AI fears.
“People are very concerned that they’re going to get the short end of the stick with [AI],” she said. “I think it goes back to just how other technological advancements have been handled and how jobs that used to be good-paying middle class jobs have been automated away.”
The sentiment is the same across political ideology. About 63% of Democrats and 57% of Republicans agree that advances in AI will eliminate jobs and make it harder to afford homes.
Still, many Americans believe AI will have the exact opposite effect. Thirty percent of those surveyed said advances in AI will help boost the U.S. economy and will, therefore, help more people afford homes.
While a growing chorus of business leaders sing to the praises of AI’s productivity potential, the reality on the ground hasn’t yet reflected predictions of sweeping layoffs. Tech companies like Jack Dorsey’s Block and Australian-American firm Atlassian have attributed wide-spanning layoffs to AI so far this year. But a study published last month revealed that thousands of company executives have yet to see real employment or productivity impact from AI.
“Part of these fears could be overblown because of all of the rhetoric about how transformative AI will be,” Fairweather said. “But that could just be hype.”
