The federal government shutdown is expected to slow the mortgage process for homebuyers and could stall sales.
“There are some impacts. A lot of it will be delays but there will be some disappointments along the way,” said Jim Wood, a research analyst at the University of Utah’s Kem C. Gardner Policy Institute.
That includes, he said, home shoppers deciding to step back amid the ongoing standoff between Republicans and Democrats in Congress over funding the federal government that resulted in the government running out of money to operate.
It comes down to the perception of potential buyers, Wood said, adding he believes some might postpone making a deal until they see how the shutdown plays out because they “just are a little bit more reluctant.”
If he was getting ready to buy a home, Wood said he might hold off, too. “I would probably just think, ‘Well, I’m just going to wait a little bit and see what happens.’ Because who knows? Maybe interest rates will plummet or all sorts of perceptions.”
The “short-term hiccup,” as Wood describes it, comes as a lot of would-be buyers in the U.S. have already been sitting on the sidelines. Polls have shown many are hesitant to make big purchases due to the economic uncertainty surrounding President Donald Trump’s tariff policies.
Is now the time to buy a home?
Clark Ivory, the CEO of Utah’s largest homebuilder, Ivory Homes, said the shutdown is adding to that uncertainty. But the temporary closure of the federal government shouldn’t be the factor stopping would-be homebuyers, he said.
“I think it’s just the opposite,” Ivory said when asked if purchases should be put off while Washington, D.C., deals with the impasse. “This has been more of a buyer’s market, and sellers and builders are very aggressive right now in helping, through rate buy-downs and concessions.”
That makes for “a better opportunity right now to go out and enter into a transaction than it would be when things work their way out and ramp back up,” he said, adding that some of the incentives being offered are likely to go away.
“When things do pick up, homebuilders like us won’t be as aggressive,” Ivory said.
He said what concerns him about the shutdown is how it affects “workers whose jobs may be put on hold, who were in the middle of purchasing, needing to close, and cannot get the proper verifications they need, or won’t be able to be certain about their ability to pick up a paycheck.”
That was an issue for federal workers the last time the federal government shuttered, for a record 35 days between December 2018 and 2019. Ivory said he’s hopeful this shutdown won’t last long, although the larger issue of economic uncertainty will still need to be addressed.
Mortgage application delays expected
Buyers moving forward with a new home purchase face delays in the mortgage process due to the shutdown. According to the online marketplace Zillow, the shutdown puts
How does the federal government shutdown affects homebuyers?
