How the Housing Market Could be Affected by the Government Shutdown

Photo Courtesy of Puget Sound Business Journal

Just as the housing market is getting better there is now a possibility of it to begin to slightly decline again. With government workers facing possible furloughs, consumers may not have the confidence to purchase a home. A steady income is needed to be able to make payments on a mortgage but some will not be receiving paychecks and may back out of deals and put off buying a new home until things become more stable again. Most lending companies will not be affected and will resume lending for mortgages since they are not federally owned. Other government funded sources for the housing market such as the Federal Housing Administration and the Department of Veterans’ Affairs may be shut down and therefore will not process applications and requests for assistance. If people are not getting the money they need, they will not be renting or buying homes during a government shut down. That being said, a short term disruption of funds during that time would certainly be detrimental, but shouldn’t have a long term affect on demand or housing affordability.