The government shutdown is causing a flurry of anxiety throughout the nation, and worry is accumulating throughout the housing industry. Despite a small fall cool down due to rising interest rates, the rebound was still moving forward with momentum, and industry experts now fear that the shutdown could stall and potentially derail the progress of housing. However, is the actual problem the shutdown, or the fear that it is creating?
“It’s mostly fear-based,” says Lawrence Yun, Chief Economist for the National Association of REALTORS. “During the first week of shut down, there was no sizable impact,” he continues.
While the U.S. Department of Agriculture—currently sidelined–provides loans directly to buyers in rural and exurban areas, Yun notes that the program only makes up 3 percent of the overall housing market.
“So three percent is currently out of the game, but the remainder—FHA, Fannie and Freddie, they are still operating, and some of the documentation requirements are being temporarily waived, so throughout the first week the shutdown appeared to have no large impact,” Yun continues.