{"id":10737,"date":"2019-05-30T12:10:49","date_gmt":"2019-05-30T19:10:49","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=10737"},"modified":"2026-03-24T12:48:34","modified_gmt":"2026-03-24T19:48:34","slug":"government-shutdown-affect-real-estate","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/","title":{"rendered":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale"},"content":{"rendered":"

When Congress can\u2019t come to an agreement on the federal budget, the U.S. government shuts down<\/a>. Many federal workers are furloughed or have to work without pay, setting off a chain reaction across their departments that intensifies the longer a political stalemate goes on.<\/p>\n

Over the past 43 years since the federal budget process was established, there have been a total of 21 shutdowns<\/a>, an average of one every other year. The 2018-2019 shutdown<\/a> was the longest in U.S. history lasting a total of 35 days. During this time<\/a>, airports faced staffing issues, people in D.C. weren\u2019t able to get a marriage license, and agencies warned that everything from food safety to national security was at risk.<\/p>\n

Nevertheless, you might assume that the one thing that\u2019d be safe from all the bickering in Washington would be the steady-as-a-rock housing market<\/a>. And it\u2019s true that it would take more than a gust of hot air from the debate floor to disrupt sound real estate economics.<\/p>\n

But housing\u2019s not totally immune to the effects of a closed government. To start, a shutdown can shake homebuyer confidence and block key steps in the loan approval process, creating delays or hiccups for people selling houses. Sellers could as a result face increased days on market<\/a> or deal with their listing\u2019s record as a \u201cback on the market<\/a>\u201d property if a buyer backs out.<\/p>\n

And while you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future by understanding these 5 fundamental effects.<\/p>\n

1. USDA and jumbo loan proceedings stall<\/h2>\n

Whether or not home sales could close during the lengthy 2018-19 government shutdown largely depended on the buyer\u2019s loan type. For buyers with USDA mortgages<\/a> or jumbo loans<\/a>, the home sale proceedings stalled completely<\/a>.<\/p>\n

\"A<\/a><\/p>\n

\"A<\/a>
Source: (NAR)<\/figcaption><\/figure>\n

However, since USDA loans are aimed at low- to moderate-income families in rural areas rather than urban<\/a>, and jumbo loans are necessary only when the loan amount exceeds maximum conforming loan limits for one-unit properties (which is $484,350 for 2019<\/a>)\u2014neither loan type is all that common.<\/p>\n

\u201cThe main loan types that are affected by a government shutdown are USDA and jumbo. However, USDA and jumbo loans make up less than 1% of our loan originations, so for the most part, it\u2019s business as usual,\u201d explains Theresa Guettler, branch manager with Caliber Home Loans<\/a>.<\/p>\n

\u201cOn jumbo loans, we are unable to order tax transcripts, so these are delayed. However, USDA loans are the most dramatically affected. The USDA does not issue new commitments during a shutdown,\u00a0so these loans are delayed until the government reopens.\u00a0We are able to close USDA loans who have already received commitments prior to the shutdown, however, sellers in rural areas are impacted.\u201d<\/p>\n

So while a shutdown could stall a home sale indefinitely for USDA or jumbo loan buyers, only sellers in rural areas or those selling higher-end homes need to prepare for this possibility.<\/p>\n

\"Papers<\/a>
Source: (Ag Ku\/<\/a> Pixabay<\/a>)<\/figcaption><\/figure>\n

2. Loans underwritten by the government get delayed<\/h2>\n

The other loan types with the greatest potential for delays during a government shutdown are FHA loans<\/a> and VA loans<\/a> because these are typically underwritten by the federal government.<\/p>\n

However, who underwrites these loans varies from lender to lender.<\/p>\n

\u201cLenders whose loans are underwritten by the FHA or the VA would be delayed by a shutdown,\u201d advises Guettler.\u00a0\u201cCaliber underwrites all of our FHA and VA loans, so this is not a problem for us.\u201d<\/p>\n

And even if the federal government is underwriting your buyer\u2019s FHA or VA loan, that doesn\u2019t mean they\u2019ll automatically be delayed during every government shutdown.<\/p>\n

Each shutdown is unique because the budgeting legislation is unique<\/a>\u2014meaning that various government programs and agencies may or may not be unfunded, partially-funded or fully-funded during any given shutdown.<\/p>\n

For example, the Department of Veteran Affairs was fully funded<\/a> throughout 2019 before the 2018-19 shutdown happened, so VA loans had minimal or no delays.<\/p>\n

Whereas for FHA loans during the 2018-19 shutdown, it all came down to whether your buyer\u2019s mortgage company was a delegated or non-delegated lender<\/a>.<\/p>\n

Non-delegated lenders must send their FHA loans to FHA underwriters for approval\u2014a service not generally available during a government shutdown. So these FHA loans are put on hold.<\/p>\n

Delegated lenders have the authority to approve or underwrite FHA loans themselves, so there typically aren\u2019t any delays. However, if the lender has questions or concerns that require input from HUD before approval is granted, that can delay a loan issued by a delegated lender during a shutdown.<\/p>\n

3. Conventional loan application processes may slow<\/h2>\n

While conventional loans<\/a> are less likely to experience shutdown-triggered delays (because they are not government-backed loans like FHA or VA<\/a>), there\u2019s still a possibility that their processing could be slowed.<\/p>\n

\u201cOne issue that could come up with a government shutdown that buyers may not be able to get their tax transcripts to verify income from the IRS,\u201d says Dean Ehrlich<\/a>, one of the top 1% of agents successfully selling homes fast in the Coral Springs, Florida area.<\/p>\n

It all comes down to the loan approval requirements<\/a> set by your buyer\u2019s lender. For example, your buyer\u2019s lender may require identity verification from the Social Security Administration<\/a> or income verification from the IRS<\/a>\u2014both services which may not be available during a shutdown.<\/p>\n

However, mortgage companies are in the business of lending money, so many take steps to avoid government shutdown delays.<\/p>\n

\u201cCaliber modifies our verification requirements to minimize the impact of a shutdown on other loan types,\u201d says Guettler. \u201cThe only conventional loans that are affected are self-employed borrowers if tax transcripts are needed.\u201d<\/p>\n

\"A<\/a>
Source: (Kaboompics)<\/figcaption><\/figure>\n

4. Buyers could lose their mortgage rate lock<\/h2>\n

No matter what type of loan your buyer has, any delays caused by a shutdown can push the limits of a buyer\u2019s mortgage rate lock<\/a>.<\/p>\n

If the buyer\u2019s loan approval is delayed until after their lock-in period<\/a> expires\u2014and interest rates have risen above their locked-in rate\u2014then they\u2019ll likely have to accept that higher interest rate, which means agreeing to a higher monthly mortgage payment.<\/p>\n

So how likely is it for mortgage interest rates to rise because of a shutdown?<\/p>\n

\u201cMortgage rates are driven by the bond market and not really affected by a shutdown,\u201d explains Guettler.<\/p>\n

\u201cHowever, after the first two weeks, it is estimated that for each week a shutdown continues, economic growth will be reduced by 0.1% to 0.2%.\u00a0So, over time the negative impact from the shutdown could have adversely affected the bond market.\u00a0 However, the Federal Reserve could offset this impact.\u201d<\/p>\n

A shutdown would have to extend for several weeks before it might pressure mortgage interest rates to rise\u2014and even then it might not happen because so many other factors influence mortgage rates<\/a>.<\/p>\n

In fact, in the midst of the 2018-19 government shutdown, mortgage interest rates hit a 9-month low<\/a>.<\/p>\n

5. Reduced consumer confidence could cause buyers to back out<\/h2>\n

From the roofs overhead to the food on the table, the federal government has its hand in so many aspects of the national economy. So it\u2019s not at all surprising that<\/p>\n

consumer confidence gets shaken<\/a> when the government shuts down.<\/p>\n

\"A<\/a>
Source: (Marketwatch<\/a>)<\/figcaption><\/figure>\n

Consumer confidence indexes are in part derived from the average household\u2019s plans to make big purchases like a house<\/a> within the next six months, so it\u2019s a good indicator of real estate market trends.<\/p>\n

So, when consumer confidence falls, chances are that demand for homes will fall, which will then cause home values to fall\u2014which can tank your home sale if buyers get nervous<\/a> or worry they\u2019re committing to pay too much for a home with a falling valuation.<\/p>\n

Why?<\/p>\n

Buyers don\u2019t want to pay more for your home than they have to. So if they see that a government shutdown is causing consumer confidence to fall, they may walk away from the sale in the hopes of getting a better deal if home values look like they\u2019ll soon follow suit.<\/p>\n

This whole domino effect of consumer confidence falling all starts with the fact that federal employees aren\u2019t getting paid.<\/p>\n

\u201cShutdowns affect federal employees, as their cash flow is limited,\u201d says Guettler.\u00a0\u201cDuring a shutdown, they\u2019re relying on their available lines of credit, so this can affect their ability to purchase a home.<\/p>\n

Not only are federal workers not making big purchases like buying a house, they\u2019re also spending less on a daily basis, which puts a dent in the overall economy<\/a>.<\/p>\n

When a shutdown is short, this economic impact is minimal. However, it can still put a damper on housing markets with a high percentage of federal employees.<\/p>\n

\u201cI didn\u2019t run into any issues with the last government shutdown, however every market is so local,\u201d says Ehrlich. \u201cIn real estate markets with a lot of federal employees, a government shutdown can certainly affect consumer confidence if they don\u2019t get their paychecks.\u201d<\/p>\n

How long would a shutdown need to be before sellers are impacted?<\/h2>\n

Unlike the stock market, the housing market moves slowly<\/a> so short term disruptions to the national economy\u2014like a government shutdown\u2014don\u2019t make much of an impact. It\u2019s only when they linger on that you need to start worrying.<\/p>\n

And even though the 2018-19 shutdown was the longest in US history, it still didn\u2019t cause much of a disruption or downturn in residential real estate.<\/p>\n

\u201cIt would have to be a longer term government shutdown before it would make an impact on national consumer confidence,\u201d says Ehrlich. \u201cThe last one was really long in my opinion, but it would have to be a prolonged one to truly affect most people.\u201d<\/p>\n

\"\"<\/p>\n

\"A<\/a>
Source: (NAR)<\/figcaption><\/figure>\n

The good news is that 11 of the previous 20 shutdowns lasted fewer than five days<\/a>. Which means that most shutdowns are too short to cause much disruption to home sales for most people\u2014especially if their buyers are working with the right mortgage company.<\/p>\n

\u201cA government shutdown would primarily affect customers who are employed by the Federal government as their income is disrupted,\u201d says Guettler.<\/p>\n

\u201cFrom a lending perspective, Caliber is a direct to Fannie\/Freddie lender and we service our loans. Therefore we were able to modify procedures so that there was minimal impact on loan closings.\u201d<\/p>\n

Unless you\u2019re selling in a market with a high population of federal employees\u2014your home sale likely won\u2019t be impacted unless the shutdown extends for several weeks or months. So in most cases, there\u2019s no reason to postpone listing even when the country\u2019s in the midst of a shutdown.<\/p>\n

Header Image Source: (Taylor Wilcox\/ Unsplash)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.<\/p>\n","protected":false},"author":37,"featured_media":10751,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[334],"tags":[],"class_list":["post-10737","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"yoast_head":"\nHow a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale<\/title>\n<meta name=\"description\" content=\"While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale\" \/>\n<meta property=\"og:description\" content=\"While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/\" \/>\n<meta property=\"og:site_name\" content=\"HomeLight Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/gohomelight\/\" \/>\n<meta property=\"article:published_time\" content=\"2019-05-30T19:10:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-24T19:48:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Christine Bartsch\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@CEBartsch\" \/>\n<meta name=\"twitter:site\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Christine Bartsch\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale","description":"While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/","og_locale":"en_US","og_type":"article","og_title":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale","og_description":"While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.","og_url":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/","og_site_name":"HomeLight Blog","article_publisher":"https:\/\/www.facebook.com\/gohomelight\/","article_published_time":"2019-05-30T19:10:49+00:00","article_modified_time":"2026-03-24T19:48:34+00:00","og_image":[{"width":1500,"height":800,"url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg","type":"image\/jpeg"}],"author":"Christine Bartsch","twitter_card":"summary_large_image","twitter_creator":"@CEBartsch","twitter_site":"@gohomelight","twitter_misc":{"Written by":"Christine Bartsch","Est. reading time":"10 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#article","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/"},"author":{"name":"Christine Bartsch","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/71ff0d89cc5def9e8525db525be21ee8"},"headline":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale","datePublished":"2019-05-30T19:10:49+00:00","dateModified":"2026-03-24T19:48:34+00:00","mainEntityOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/"},"wordCount":1834,"publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg","articleSection":["News & Market Trends"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/","url":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/","name":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#primaryimage"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg","datePublished":"2019-05-30T19:10:49+00:00","dateModified":"2026-03-24T19:48:34+00:00","description":"While you can\u2019t prevent another government shutdown, you can prepare yourself for the impact it could have on your home sale now or in the future.","breadcrumb":{"@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#primaryimage","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/government-shutdown-affect-real-estate.jpg","width":1500,"height":800,"caption":"Source: (Taylor Wilcox\/ Unsplash)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.homelight.com\/blog\/government-shutdown-affect-real-estate\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.homelight.com\/blog\/"},{"@type":"ListItem","position":2,"name":"How a Government Shutdown Affects Real Estate, Down to Your Individual Home Sale"}]},{"@type":"WebSite","@id":"https:\/\/www.homelight.com\/blog\/#website","url":"https:\/\/www.homelight.com\/blog\/","name":"HomeLight Blog","description":"Real Estate Advice from America's Top Agents","publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.homelight.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.homelight.com\/blog\/#organization","name":"HomeLight","url":"https:\/\/www.homelight.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","width":1348,"height":262,"caption":"HomeLight"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/gohomelight\/","https:\/\/x.com\/gohomelight","https:\/\/www.linkedin.com\/company\/homelight\/","https:\/\/www.youtube.com\/channel\/UCimugR9XF17-OZ7B9fNnxWw","https:\/\/en.wikipedia.org\/wiki\/HomeLight"],"description":"Everything you need to know to sell your house faster and for more money. Articles, guides, and advice from top agents all over the U.S.","email":"support@homelight.com","telephone":"(888) 688-0350","legalName":"HomeLight","foundingDate":"2012-01-01","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"201","maxValue":"500"}},{"@type":"Person","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/71ff0d89cc5def9e8525db525be21ee8","name":"Christine Bartsch","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/40282e0cb86b82cac5c35ac45fdd1f584ce664780c5c5808924f6f29eda7c4ae?s=96&d=blank&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/40282e0cb86b82cac5c35ac45fdd1f584ce664780c5c5808924f6f29eda7c4ae?s=96&d=blank&r=g","caption":"Christine Bartsch"},"description":"Former art and design instructor Christine Bartsch holds an MFA in creative writing from Spalding University. Launching her writing career in 2007, Christine has crafted interior design content for companies including USA Today and Houzz.","sameAs":["https:\/\/www.linkedin.com\/in\/christinebartsch\/","https:\/\/x.com\/CEBartsch"],"url":"https:\/\/www.homelight.com\/blog\/author\/christine-bartsch\/"}]}},"_links":{"self":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/10737","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/comments?post=10737"}],"version-history":[{"count":0,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/10737\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media\/10751"}],"wp:attachment":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media?parent=10737"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/categories?post=10737"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/tags?post=10737"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}