October 14, 2025
The more they stay the same. New Administration. New Congress. But the deadline for a funding bill to keep the government open goes down to the last second. And for the first time in five years, they did not kick the can down the road. Instead, both sides walked away from the table. Apparently, they will need to shut the government down before they come up with another non-permanent solution. The markets are getting so used to this routine that they barely react to the drama anymore. The last time they shut down for a significant period of time (five years ago), they did so for over a month. While the stock and bond markets are barely reacting, if the shutdown drags on, what would the effect be on the real estate market?
In our opinion, the timing of this shutdown is very inopportune for the real estate market. It would never be ideal, but in this case the markets were finally gaining momentum with housing prices leveling off and mortgage rates coming down. The uncertainty caused by the shutdown would threaten to stall this momentum as consumer confidence falters. There is also the interruption of services provided by the government within the real estate process. Federal flood insurance, rural housing and FHA lending are all programs which might be halted and/or affected in some ways.
Certainly, many government services must remain in place within a shut-down. We have to have a military to be able to protect the country. Social security checks must be issued. If not, there would be financial and social chaos. The Federal Reserve also would continue to implement fiscal policy. Which brings up the question–how might the shutdown affect the Fed’s rate decision at the end of the month? There will be less data to rely upon if the shutdown continues. No employment or inflation reports. But the fact that the economy could be affected negatively might spur the Fed to lower rates in any case. For now, all we can do is speculate and hope the shut down does not last that long.
Source: Origination pro
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