The federal government has been shut down for a week now, in the first shutdown to hit the country since 2018.
As of midday Wednesday, the Senate was preparing to vote on conflicting measures about how to fund the government, as Democrats and Republicans largely remain at an impasse.
Adding further alarm to the uncertainty government workers must feel now, a memo released from the White House’s Office of Management and Budget on Tuesday suggested that the roughly 750,000 furloughed federal workers might not receive back pay once the government reopens, violating the Government Employee Fair Treatment Act, which Trump signed into law in 2019.
As the shutdown continues, the real estate industry will also increasingly feel the ripple effects. What follows are some of the main ways in which the industry stands to be impacted.
Lack of housing data
One of the big things missing as a result of the shutdown is the Bureau of Labor Statistics’ (BLS) jobs report, which would have been released last week. The report provides insight into the health of the economy and also provides insight into what direction the housing market might be moving in. When jobs are up, Americans feel more positive about the economy and are more likely to transact.
Alternative private sector sources on jobs were less optimistic than expected. The ADP jobs report showed the economy lost 32,000 jobs in September when a 50,000 jobs gain was anticipated.
The picture was a little less bleak in the data released by global investment firm Carlyle, which showed job growth of 17,000 in September. The firm’s report also showed that private construction spending decreased by 2.5 percent year over year.
Depending on how long the shutdown lasts, data that the industry typically cover may also not immediately be available. In addition to the BLS, any data reports typically released by the U.S. Census Bureau and the Bureau of Economic Analysis will not be published during the shutdown.
That means that if the shutdown lasts through the end of next week, for instance, real estate professionals will also be missing out on the Census Bureau’s monthly new residential construction report.
Unemployment and pay issues for government workers
Although government workers are located all across the country, their high concentration in the nation’s capital could have an outsized impact on Washington, D.C.’s housing market if the shutdown continues for an extended period.
D.C. has already faced similar challenges this year with sweeping government layoffs as part of the Trump administration’s DOGE cost-slashing initiatives. Roughly two-thirds of the 150,000-plus federal workers who accepted buyout packages earlier in 2025 stopped getting paid last week, and the remainder will be off the payroll by the end of this year, the Office of Personnel Management said.
With the administration saying that more federal job cuts may be on the horizon, ex-federal workers without a job may look to relocate elsewhere, or at least, avoid buying or selling while they’re in limbo.
However, homeowners in the region may have more incentive to hang on to their property in D.C., rather than flee. More than 60 percent of the Washington, D.C., region’s households have mortgage rates that are less than 4 percent, compared to 53 percent of mortgages across the country, fintech and data company Intercontinental Exchange reported to The Wall Street Journal. Since mortgage rates today have not fallen below 6 percent, that’s a pretty big incentive to hold out.
Delayed decision-making on home moves
The majority of Americans say that the government shutdown is not impacting their plans to make a big purchase, like a home or a car, a Redfin analysis showed on Wednesday.
But, about 17 percent of Americans are postponing their plans for those big purchases due to the shutdown, Redfin said, and 7 percent are canceling those plans entirely.
That data is according to a survey Redfin commissioned by Ipsos that was sent to 1,005 U.S. residents on Oct. 3, 2025.
Redfin noted that most Americans who are canceling or delaying their purchases are not directly impacted by the shutdown (as in, they’re not a government employee). Instead, many are simply viewing this as one more straw threatening to break the camel’s back when it comes to economic uncertainty in the U.S. today.
“A government shutdown doesn’t just stop paychecks for some federal employees — it shakes the financial confidence of Americans,” Redfin Chief Economist Daryl Fairweather said in the company’s report. “People across the country are taking in the news and thinking, ‘We’ve faced inflation, tariffs, job losses, a volatile stock market, and now a government shutdown — what’s next?’ It’s understandable that some people are reconsidering buying a home or a car when the economy feels uncertain.”
Mortgage rates and government-backed home loans
Growing economic uncertainty caused by the shutdown could lead to lower mortgage rates as institutional investors move money out of the stock market and into investments that are seen as more safe, like bonds and mortgage-backed securities. Therefore, the Fed could opt to ease rates by another quarter percentage point as a risk management move, some economists have suggested.
During government shutdowns, the U.S. Department of Housing and Urban Development has a system in place to allow many housing programs to continue with “limited operations,” while others that require a significant amount of staff involvement may be more significantly disrupted or paused, NAR said in a recent member bulletin.
Likewise, for FHA, VA and USDA loans, there may be disruptions or delays in these lending programs, but there is usually a plan in place for maintaining essential functions during a shutdown, the Mortgage Bankers Association told Inman.
Flood insurance
Homeowners who were hoping to get a new policy sooner rather than later will have to wait it out until the shutdown has ended, as the National Flood Insurance Program does not issue new policies during a shutdown. That could impact roughly 1,360 home sale closings per day of a shutdown, according to data from the National Association of Realtors.
Florida homebuyers are taking the biggest hit in this respect, with the shutdown potentially delaying or canceling about 14,870 home sale closings per month of a shutdown if homeowners want NFIP insurance. Therefore, a shutdown that takes place during hurricane season is one of the most inopportune times for homebuyers purchasing in flood-prone areas.
Flood insurance is typically required in high-risk flood areas on properties with government-backed mortgages, but during a shutdown, that requirement is suspended, which gives lenders discretion about whether or not to approve mortgages in special flood hazard areas. Homeowners also have the option to buy private flood insurance, and during a shutdown, can opt to assign their existing flood insurance policy to the new homebuyer.
