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NAR Artificial Intelligence (AI) Update: What Washington Insiders Are Watching

Issue Date: July 28, 2026


The AI debate has shifted quickly over the past month. Policymakers are spending less time discussing how businesses can use AI and more time focusing on the catastrophic risks posed by increasingly powerful AI systems. Recent reports suggest advanced AI models can identify unknown, decades-old software vulnerabilities, automate sophisticated multipronged cyberattacks, and perform tasks that previously required advanced hacking, coding and cybersecurity skills. At the same time, competition from China and the rapid pace of AI development are raising new questions about oversight, safety testing, and national security. The three hearings below provide a snapshot of where the debate is heading and what it could mean for real estate professionals.

1. House Panel Examines Advanced AI Model Cyber Risks

What happened: A House Homeland Security hearing examined how advanced AI models are changing cybersecurity. Witnesses testified that AI systems can now rival—or in some cases exceed—human capabilities in identifying software vulnerabilities, automating novel cyberattacks, and exploiting previously unknown weaknesses in critical software and networks. Lawmakers expressed concern about what these capabilities could mean for critical infrastructure, including energy systems, healthcare providers, water systems, and financial institutions—and what the federal government can do to keep the nation safe.

Why it matters: Real estate professionals are already frequent targets of cybercrime and fraud. For instance, the 2023 Rapattoni cyberattack disrupted dozens of MLSs and highlighted the industry's exposure to cyber threats. Increasingly, bad actors may be able to use AI tools to launch attacks without possessing hacking skills themselves. Policymakers from both parties appear increasingly interested in ensuring that advanced AI systems undergo at least voluntary—and potentially mandatory—safety testing before they are widely deployed.

2. House Panel Advances U.S. AI Research and Standards

What happened: While Washington is focused on strengthening AI cybersecurity defenses, the House Science Committee recently advanced 10 bipartisan AI bills by overwhelming margins. The measures generally direct the National Institute of Standards and Technology (NIST) to develop voluntary standards rather than mandates and include H.R. 9363, the AI Security and Innovation Act, which incorporates many recommendations from the bipartisan House AI Task Force established last Congress.

Why it matters: Strengthening federal research and development remains one of the few areas of broad bipartisan agreement in AI policy. While Congress continues debating whether the federal government should preempt the growing patchwork of state AI laws, lawmakers may be able to attach less controversial AI science bills to larger must-pass legislation later this year. These measures could also influence how states and federal agencies approach future AI regulation, as many policymakers view NIST standards as a foundation for future policy.

What's next: Now that the House Science Committee has acted, the bills must still be considered by the full House and Senate before they can become law.

3. House Panel Wants to Help Small Businesses Use AI

What happened: Witnesses at a House Small Business Committee hearing repeatedly testified that AI is helping small businesses compete with larger companies. Several provided evidence that AI is making workers more productive rather than replacing them and that many businesses are actually expanding their workforces as they adopt AI. Witnesses also emphasized that many small businesses still lack the training and resources needed to use AI effectively.

Along with the noted benefits of AI for small businesses came some concerns. The patchwork of state AI laws was a common theme. Witnesses also expressed a strong preference for a risk-based national AI framework and the need to make AI affordable for small businesses. There was also a recognition that data privacy legislation must go hand in hand with AI regulation.

Why it matters: Most of the real estate industry is made up of small businesses and independent contractors. The hearing highlighted growing bipartisan support for providing small businesses with AI education, training and technical assistance so they can benefit from the technology rather than fall behind larger competitors.

What to Watch

  • Voluntary vs. mandatory AI testing. One of the biggest questions in Washington is whether the administration's current voluntary framework for vetting advanced AI systems will eventually become a mandatory testing regime. The debate increasingly includes open-weight AI models, which are not yet as powerful as the leading proprietary models but are generally less expensive for developers and deployers. Recent cybersecurity concerns and advances in frontier AI have intensified that discussion.
  • Federal vs. state AI regulation. Congress remains divided over the extent to which federal law should “preempt,” or replace, state AI laws. Congress has also not resolved whether states would retain authority to regulate “deployers” and end users of AI. One approach would establish federal rules for AI model development to address cybersecurity, safety and national security concerns while preserving state consumer protection and civil rights laws governing the deployment and use of AI.
  • Senate Commerce AI markup. The Senate Commerce Committee could consider AI legislation the week of Aug. 3, which could provide the clearest indication yet of which AI proposals have a realistic path forward this Congress.

New Bills To Consider:

NAR AI Engagement

Given the rapid pace of AI developments, NAR remains actively engaged in representing the real estate industry. NAR will continue monitoring these issues, educating policymakers about how AI is used in real estate, and advocating for policies that encourage innovation, support small businesses, protect consumers, strengthen cybersecurity, and avoid unnecessary burdens on real estate professionals and MLSs.

Congressional Hearings and Markups

Contacts

Austin Perez, [email protected], 202-383-1046
Susan Frederick, [email protected], 202-383-1116