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The federal government shutdown began on October 1, and it is already creating uncertainty in the housing market. Real estate depends on many government-backed programs, and when those programs pause, buyers and sellers feel the effects quickly.
Flood Insurance at Risk
One of the biggest impacts is on the National Flood Insurance Program (NFIP). With the shutdown in place, NFIP cannot issue new policies. This puts an estimated 1,400 property sales at risk every day.
Existing policies remain valid for 30 days and can still be transferred to new owners. But the longer the shutdown continues, the more uncertainty builds for transactions that depend on flood insurance.
Delays in Loans and Verifications
The shutdown also slows or stops other critical services.
- IRS income verification may be delayed.
- FHA and VA loan processing can be disrupted.
- Federal housing program funding may stall.
These delays mean that closings can be postponed, financing may take longer, and buyers, sellers, and renters could all face new challenges.
A Market Already Under Pressure
Real estate makes up nearly 20% of the U.S. economy. Disruptions like this add stress to a market that already struggles with affordability and limited supply. Hundreds of thousands of people could feel the effects if the shutdown continues.
Industry Advocacy
The National Association of REALTORS® (NAR) has called on Congress to act. They are urging lawmakers to extend NFIP and pass a funding agreement to reopen the government. As NAR notes, the NFIP supports 500,000 home sales every year, 1 million jobs, and $70 billion in economic activity.
What Buyers and Sellers Should Do
For buyers, be prepared for possible delays in loan approvals or insurance coverage. Stay in close contact with your lender and agent.
For sellers, understand that closing timelines could stretch. Flexibility and communication with buyers are key.
Final Thoughts
The longer the shutdown lasts, the more real estate transactions are at risk. If you’re considering buying or selling in Haywood County or Western North Carolina, connect with a local expert at Better Homes and Gardens Real Estate Heritage who understands how to navigate these challenges.
