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

The short answer: No.

The housing market doesn’t freeze. Homes are still being bought and sold, contracts are still signed, and closings continue to happen. While a few parts of the process might slow down, the market as a whole keeps moving forward.

 

What Typically Happens During a Shutdown

When the government shuts down, certain federal agencies close or reduce operations. That can lead to some delays in real estate, especially when it comes to specific types of loans and insurance:

  • FHA, VA, and USDA loans (which make up roughly one-quarter of all mortgage applications) may take longer to process due to agency furloughs.

  • According to Zillow, over 2,500 mortgage originations per workday are at risk of delays during a shutdown.

  • Flood insurance approvals through the National Flood Insurance Program may also be temporarily paused, which can delay closings in flood-prone areas.

Even with these slowdowns, most real estate transactions still move forward. Buyers keep buying, sellers keep selling, and agents continue helping clients reach the closing table.

 

The Market Bounces Back Quickly

If we look back at the most recent government shutdown (which lasted 35 days at the end of 2018), the data shows only a brief dip in sales activity—followed by a quick rebound once the government reopened.

According to the National Association of Realtors (NAR), existing home sales slowed for about two months during that time. However, once the shutdown ended, delayed closings were completed, and sales activity returned to normal levels almost immediately.

In other words, while a shutdown may cause short-term disruptions, it doesn’t have a lasting impact on the housing market.

 

What This Means for You

If you’re currently buying or selling a home, there’s no need to panic. Most deals still move forward—sometimes just a few days later than planned. As Jeff Ostrowski, Housing Market Analyst at Bankrate, notes:

“If you’re expecting to close in a week or a month, there could be some slight delay, but 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 entering the market, a temporary slowdown could actually work to your advantage. When some buyers and sellers step back during uncertain times, you might find less competition and more room to negotiate.

These brief pauses often create great opportunities for well-prepared buyers and motivated sellers.

 

The Bottom Line

A government shutdown might cause some short-term delays—but it doesn’t derail the housing market. Historically, sales bounce right back once operations resume.

If you’re thinking about buying or selling a home, now’s the time to plan your next move. Contact Scott and The Smolen Team for expert advice and guidance to help you navigate any market conditions with confidence.