Locked Out and Left Behind: How the Government Shutdown Hurts Buyers and Homeowners

The longest government shutdown in U.S. history is stalling property sales and creating serious risks for homeowners and businesses in flood-prone areas. With the full government shutdown now surpassing 30 days, the nation has entered unprecedented territory. The fallout extends far beyond Washington, as local economies strain and homebuyers across the country face stalled transactions and shaken confidence. This marks the longest full government shutdown in U.S. history.

Essential housing and mortgage programs are running at limited capacity—or not at all—leaving buyers stranded, sellers waiting, and real estate professionals caught in limbo. Many federal agencies critical to housing operations are short-staffed or have suspended key functions entirely.

The National Flood Insurance Program (NFIP) can no longer issue new policies. While existing coverage remains active and transferable, the uncertainty grows daily. Without congressional action, homeowners and businesses in flood-prone areas could see policies lapse, exposing families and properties to significant risk at the height of hurricane season.

“We’ve never seen a full government shutdown last beyond 30 days, so the long-term effects are unknown,” said Shannon McGahn, NAR Executive Vice President and Chief Advocacy Officer. “But we do know the ripple effects worsen each day. Delays in FHA and VA closings, the suspension of new USDA loans, and the halt of NFIP policies are destabilizing the market and hurting families nationwide.”

NAR continues to urge Congress to pass a clean, bipartisan continuing resolution or long-term funding measure to reopen the government. Each additional day of uncertainty threatens programs that help buyers, sellers, and property owners navigate an already challenging market.

A Unified Business Response

NAR’s advocacy is part of a broader coalition of national business organizations—including Airlines for America, the American Bankers Association, the American Hotel & Lodging Association, the Business Roundtable, and others—calling for immediate congressional action.

“Government shutdowns impose real, escalating costs,” the coalition wrote in a joint statement. “Public estimates suggest $10–$15 billion in lost output each week. The longer the shutdown persists, the more lasting and irrecoverable the economic damage becomes.”

Across industries, the message is clear: economic stability depends on government stability.

Real-World Impact on Buyers and Communities

As federal workers miss paychecks, short-term cash flow issues ripple through local economies. Even with guaranteed back pay, uncertainty is prompting many potential buyers to delay purchases.

NAR Chief Economist Dr. Lawrence Yun noted, “Mortgage rates are trending toward three-year lows, improving affordability—but the government shutdown could temporarily slow home sales activity.” In communities with large numbers of federal employees or contractors, listings are lingering longer and sellers are adjusting expectations.

NAR has mobilized its members nationwide, encouraging all 50 state REALTOR® associations to contact lawmakers and detail the shutdown’s local impacts. Over 40 associations have already responded, demanding immediate action to restore stability to the housing market.

Last week, NAR issued a Call for Information—distinct from a Call for Action—asking members to share firsthand accounts of how the shutdown is disrupting transactions.

“Our rapid call drew more than 600 responses within days,” McGahn said. “Members are reporting stalled deals, drained savings, and halted closings.”

The Ripple Effects on Federal Loan Programs

Each day, roughly 2,000 FHA loans close nationwide. While most continue, many borrowers face delays in receiving essential documentation—such as IRS verifications or federal payoff statements—needed to finalize purchases. FHA condo approvals, already limited, are now paused entirely.

Meanwhile, about 1,000 VA loans close daily. Most are proceeding, but active-duty service members affected by delayed pay or relocation orders are encountering significant challenges in completing transactions.

In rural America, USDA home loans—a vital financing source where conventional options are scarce—have been suspended completely, leaving many borrowers without alternatives.

A Shutdown Felt Nationwide

Though centered in Washington, the consequences of the shutdown are being felt in every community. From urban neighborhoods to rural towns, the stalling of housing programs and mortgage support systems underscores a simple truth: when government stops, so does progress.