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What a Government Shutdown Really Means for the Housing Market

There’s been a lot of talk lately about how a government shutdown impacts the housing market. You might be wondering: Is it causing everything to grind to a halt?

The short answer? No.

The housing market doesn’t stop. It keeps moving. Homes are still being bought and sold, contracts are still being signed, and closings are still happening. The difference is that a few parts of the process may slow down a little, but overall, the market continues to function.

Here’s What Typically Happens

Whenever the government shuts down, some federal agencies temporarily close or scale back their operations. That can cause a few hiccups in real estate, especially when it comes to processing certain types of government loans and insurance requirements:

• “Applicants for FHA, VA, or USDA loans—which account for about one-quarter of all mortgage applications—may encounter significant processing delays due to agency furloughs.” - Selma Hepp, Chief Economist at Cotality
• “By recent estimates, more than 2,500 mortgage originations per working day are at risk of delays during a shutdown . . .”  - Zillow
• Flood insurance approvals may also be paused. The National Flood Insurance Program can be temporarily affected, which delays closings in flood zones.

Even with those challenges and delays, most transactions still go through. Buyers keep buying, sellers keep selling, and agents keep helping people move forward.

The Housing Market Usually Bounces Back Fast

And you can see that play out in this data. If you look back at the most recent government shutdown that began at the end of 2018 and lasted for 35 days, sales activity dipped very slightly during the closure but picked right back up once the government reopened.

Data from the National Association of Realtors (NAR) shows existing home sales slowed for about two months, and then rebounded quickly as delayed closings worked their way through the system when the government reopened (see graph below):

What’s important to note is that the slowdown you see in the orange bars on this graph wasn’t simply due to seasonality in a typical housing market cycle. The sharper, shorter drop in this case lines up exactly with the 35-day government shutdown, and then sales bounced back as soon as it ended.

What This Means for You

If you’re in the middle of buying or selling a home, don’t panic. Most deals will still move forward, even if it takes a few extra days. Jeff Ostrowski, Housing Market Analyst at Bankrate, explains:

“If you’re expecting to close in a week or a month, there could be some slight delay, but I think for most people, it’s probably going to be a blip more than a real deal killer.”

And if you’re just starting to think about buying or selling, this could actually work in your favor. Some buyers and sellers may become cautious and pause their plans during times of uncertainty, like this, and that can open a short window of opportunity.

When fewer people are active in the market, well-prepared buyers may find less competition for homes, and motivated sellers may be more willing to negotiate. These brief slowdowns often create a moment where you can make a move that would be harder once activity ramps back up.

Bottom Line

A government shutdown can cause short-term delays for some buyers, but it doesn’t derail the housing market. The last time this happened, sales picked back up as soon as the government re-opened.

If you’re unsure how this might affect your plans, or just want to make sense of what’s happening, let’s connect.

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As you know, I’m a Licensed Real Estate Agent. However, I work a little differently than other agents. Most agents typically serve only one market.

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As a Relocation Specialist with Realty Connect, I belong to an nationwide network of over 25,000 top-rated agents serving every zip code in all 50 states. Instead of helping you buy or sell a home personally, I help match my clients with up to 3 great agents who specialize in your market. The best part? This is a 100% FREE service, so there is no cost, pressure or obligation! With my experience and connections, I can quickly help you find the perfect agent better than what most people are able to do on their own.

What a Government Shutdown Really Means for the Housing Market [VIDEO]

A government shutdown can cause short-term delays for some buyers, but it doesn’t derail the housing market. The last time this happened, sales picked back up as soon as the government re-opened.

If you’re unsure how this might affect your plans, or just want to make sense of what’s happening, let’s connect.

Click here to view video

Want to chat or write?

Call/Text; 757-876-7443, Email: chris@realestatewithmrg.com

1 in 3 First-Time Buyers Have Student Loan Debt [GRAPHIC]

Buying a home when you have student loans is possible.

Data shows 32% of first-time buyers have student debt. And the typical amount is $30,000.

So, if you’ve been holding off on buying your first home because you thought you had to pay off those loans first.

Or, because you assumed it just wasn’t possible for you to buy, it’s time to talk to a lender.

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What a Government Shutdown Really Means for the Housing Market [PREVIEW VIDEO]

On the November 8^th Video Podcast of “Real Estate with Mr. G”, we will discuss - What a Government Shutdown Really Means for the Housing Market.

Topics include: Housing Loans, The Housing Market, How it Affects You, and MUCH, MUCH, MORE!!!

A critical episode on today’s current events!!!

Click here to view Video

"Real Estate with Mr., G" Video Podcast. Saturdays at 7 pm

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________________________________________________________________

As you know, I’m a Licensed Real Estate Agent. However, I work a little differently than other agents. Most agents typically serve only 1 market. I can help you buy or sell a home anywhere in the US!

As a Relocation Specialist with Realty Connect, I belong to an exclusive (nationwide) network of over 25,000 top-rated agents serving EVERY zip code in ALL 50 states. Instead of helping you buy or sell a home personally, I will help match you with up to 3 great agents that specialize in your market.

The best part? This is a 100% FREE service, so there is NO cost, pressure or obligation! With my experience and connections, I can help you find the PERFECT agent better than what most people are able to do on their own.

Ready to get started? Great! Please tell me a little more about your real estate goals by completing my referral request form. I look forward to helping you find a great agent! https://realtyconnect.pro/christopher-garguilo

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