On Oct. 22, a few weeks into the federal government shutdown, the National Association of REALTORS® issued a Call For Information to its full membership to take the pulse on the ramifications for real estate professionals and their clients.
Unlike a traditional Call For Action (CFA), which prompts members to simply click and send a message to their members of Congress, this request invited NAR members to share their own stories about how the government shutdown was impacting their clients, businesses and communities.
“What’s at stake for housing and homeownership nationwide is important for Americans to thrive and step into their dreams,” wrote one member. “Our government must reopen for the people.”
The response rate was remarkable: 641 members from all 50 states, Washington, D.C., and Puerto Rico submitted firsthand accounts, representing 386 local associations—about 35% of all associations nationwide. While engagement metrics differ from a one-click CFA, the volume and depth of these NAR member responses underscored the power of REALTORS® as trusted messengers on the front lines of the housing market.
The Call For Information shows:
- 35.6% of stories mention one of more federal housing programs, like the Federal Housing Administration (FHA), U.S. Department of Housing & Urban Development (HUD), Internal Revenue Service (IRS), National Flood Insurance Program (NFIP), U.S. Department of Agriculture (USDA), and U.S. Department of Veterans Affairs (VA).
- The most frequently cited impacts were USDA, VA, NFIP/Flood Insurance and FHA.
- There were over 60 stories highlighting hardship, family strain, or the domino effects of delayed transactions.
- 259 unique associations were represented in responses (approximately 24% of local boards)
Collapsing Deals, Low Morale
Perhaps unsurprisingly, most responses were from high-population states including Florida, Texas and California.
One North Carolina agent, who is a REALTOR®, explained that home sales are being delayed due to holdups in NFIP flood insurance renewals and USDA loan approvals, two essential programs for the state’s coastal and rural areas. In some North Carolina communities, almost every financed home purchase relies on one or both of these federal services. As a result, deals are collapsing, and families are losing the homes they’ve worked tirelessly to obtain.
The effects extend well beyond the housing market: Many North Carolinians, including military families and federal employees, are struggling to afford basic necessities, while local small businesses that depend on their spending are seeing steep drops in revenue. “The financial strain is real, the morale is low, and the longer this continues, the harder recovery will be for working families and small businesses alike,” the member reported.
Many other members reported similar experiences, with clients often feeling uncertain about the real estate market and experiencing a lack of consumer confidence. This uncertainty frequently led to stalled transactions, disrupting multiple deals, and affecting buyers, sellers, agents, lenders and contractors alike.
‘A Train Wreck’ for Escrows, Military Families and Local Businesses
“As a REALTOR®, I am seeing firsthand how the federal government shutdown is disrupting the housing market,” one member in California said. “As a NAR member, I want to help illustrate the real impacts the shutdown has had on my business, clients and community—such as delayed FHA, VA or conventional loans, especially without access to government flood insurance. Military families are being stifled by this shutdown, with delayed loans and added strain to their finances. This is a deterrent for our military service members who give their lives willingly to serve this country. Sellers are unsure about proceeding due to market volatility and concerns about affordability. So many buyers are being impacted as the buyer pool has diminished.”
The member continued: “Additionally, in California, obtaining flood insurance has become a major problem, so having sources available from the government has allowed us to close our escrows. However, without these options, due to the shutdown, it’s a train wreck for our escrows leaving us with delays and obstacles to struggle to get our escrows closed.”
Chipping Away at the Foundation
The shutdown may be centered in Washington, but its costs are being paid in every community across America.
“The National Association of REALTORS® urges Congress to come together and pass a clean, bipartisan continuing resolution or a long-term funding package to restore stability to the housing market and the broader economy. Every day that passes without action chips away at the foundation of the American Dream,” says Shannon McGahn, NAR executive vice president and chief advocacy officer.
