Summary
Possibility of a U.S. government shutdown is rising, which could affect the housing market. Federal worker layoffs and delays in mortgage processing might occur, impacting those seeking government-backed loans and flood insurance.
Key Facts
- A government shutdown might occur if lawmakers do not reach a deal by September 30.
- During a shutdown, some federal workers could be laid off, affecting services like mortgage processing.
- About a quarter to a third of loan applications in the U.S. are for FHA or VA loans, which could face delays.
- Federal flood insurance policies may expire, halting sales in flood-prone areas such as Florida and Louisiana.
- Mortgage applications needing IRS data might be delayed due to potential federal employee layoffs.
- Lower mortgage rates are currently attracting buyers, but a shutdown could affect this.
- The outcome of the shutdown might impact Federal Reserve decisions on interest rates.
- New jobs data critical for the market is expected on October 3, but may be delayed if the shutdown occurs.
