As I am writing this Friday morning, it looks like we are heading towards another government shutdown. By the time you read this, the shutdown may have been averted, but if not, here are some ways the shutdown will affect the real estate market.
Markets can adjust for a short term shutdown, but the longer it goes on, the more unstable things get. This may cause mortgage interest rates to fluctuate or shoot up if this lingers past our debt ceiling date. This increase may deter buyers from buying or may increase debt to income ratios and loan approvals. If buyers aren’t buying, then demand is lowered and this would cause a drop in home values.
If you have a house under contract and the shutdown happens, the best thing to do is reach out to your agent, the title company handling the sale and if you are a buyer, your loan officer to see what the impact is on you and your deal. Even if you are not a government employee, the shutdown may affect you.