As the partial government shutdown continues the National Association of Realtors® contacted a sample of its members to see if the real estate market is as yet feeling any impact. At present, the Department of Housing and Urban Development (HUD) and the Department of Agriculture are essentially closed, and the Internal Revenue Service is operating at a 15 percent staffing level. The Veterans Administration and the Federal Housing Finance Agency (FHFA) say they are operating as usual
NAR’s online survey of its members had 2,211 usable responses. Seventy-five percent reported no impact to their contract signings or closings. However, 11 percent did report problems affecting current clients and 11 percent affecting potential ones. Those respondents were asked for further details and could give more than one response.
The most common impact, noted in 25 percent of responses, was non-government employee clients who decided not to buy due to general economic uncertainty. Nine percent reported the same decision on the part of federal employees. Six percent of respondents had a seller who could not sell because of their employment. Three percent had a buyer who received a lender rejection because they were either a federal employee or a contractor furloughed by the shutdown and another three percent had a federal contractor employee who decided not to buy because of lost income.
Lender delays were another reported problem and 17 percent reported this occurred with a USDA loan, 9 percent with an FHA loan, 6 percent a VA loan, and 13 percent reported problems due to a lack of an IRS income verification. There were also bids lost due to the type of buyer financing; 6 percent because the buyer was using an FHA loan, 4 percent because of a USDA loan, and 3 percent due to a VA loan.
A small percentage (2 percent) reported that contracts were terminated because buyers were using VA or FHA loans and 1 percent because the buyer was using a VA loan.
The current shutdown, now in its 18th day, is second in length only to the shutdown in December 1995-January 1996 and is the third since the beginning of 2018. In past shutdowns, 59 percent of respondents were active in real estate and were not impacted. However, 13 percent had delayed transactions and three percent had lost transactions.