Government shutdowns result in millions of furloughed federal employees and numerous agencies getting their funding cut off. But a stalemate in Congress over the budget has ripple effects that reach the housing market as well. In 2013, during the last government shutdown, approximately 17 percent of closings were delayed according to the National Association of Realtors.
Borrowers seeking a FHA or VA home loan could face roadblocks that delay their purchase. The Department of Housing and Urban Development, which processes FHA loans is among the agencies impacted by a shutdown.
An FAQ published on the HUD website states, "With each day the shutdown continues, we can expect an increase in the impacts on potential homeowners, home sellers and the entire housing market. A protracted shutdown could see a decline in home sales, reversing the trend toward a strengthening market."
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.5 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.