What a Government Shutdown Really Means for the Housing Market

There’s been a lot of buzz lately about how a government shutdown might affect the housing market. You might be wondering — does everything just stop?

The short answer: No.

Homes are still being bought and sold. Contracts are still being signed. Closings are still happening. The market doesn’t stop—it just slows down a little in a few areas.

What Actually Happens During a Shutdown

When the government shuts down, some federal agencies close or reduce staff. That can cause a few delays, especially with certain types of loans and insurance.

For example:

• FHA, VA, and USDA loans (which make up about 25% of all mortgages) may take longer to process due to agency furloughs.

• Flood insurance approvals through the National Flood Insurance Program might pause temporarily, delaying closings in flood zones.

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Still, even with those hiccups, the majority of real estate transactions move forward. Buyers keep buying. Sellers keep selling. Agents keep helping people close deals.

The Market Always Bounces Back

History shows the housing market rebounds quickly after a shutdown.

Take the last one at the end of 2018, which lasted 35 days. Home sales dipped slightly during that period but picked right back up once the government reopened.

According to the National Association of Realtors (NAR), existing home sales slowed for about two months, then surged as delayed closings went through. In other words — the slowdown was temporary, not a crash.

If you’re buying or selling a home right now, don’t stress. Most transactions will still close, though some may take a few extra days.

As Jeff Ostrowski from Bankrate puts it:

“If you’re expecting to close in a week or a month, there could be some slight delay, but for most people, it’s just a blip—not a deal breaker.”

And if you’re just starting your home search or considering selling, this period could actually be an opportunity.

When some buyers or sellers step back during uncertainty, competition often drops. That means buyers might face less bidding pressure, and sellers could find motivated buyers ready to move.

A government shutdown might cause short-term delays, but it doesn’t derail the housing market. Activity typically bounces back fast once operations resume.

If you’re wondering how a potential shutdown could affect your plans, connect with a local real estate expert who can help you navigate the process with confidence.