What a Government Shutdown Means for Real Estate Transactions

As of October 1, 2025 at 12:01 a.m., the United States government has officially shut down. If you are in the middle of buying or selling a home, it is natural to feel uneasy. Let’s take a step back and look at what a shutdown really is, why it happens, and what it means for real estate so you can feel confident moving forward.

What is a Government Shutdown?

Each year, Congress must pass spending bills to fund federal agencies. If lawmakers cannot agree on those bills (or temporary extensions), funding lapses. When that happens, many non-essential government functions pause until funding is restored.

Why Does It Happen?

Shutdowns usually result from political disagreements over budgets, spending levels, or policy add-ons. They are not caused by economic collapse. Think of it more like a pause button when Congress cannot agree on how to move forward.

How Often Do They Happen?

Since 1980, the U.S. has seen 14 shutdowns, ranging from just a few days to the record-long 35-day shutdown in 2018–2019. This is not new. We have been through it before, and we have always come out on the other side.

How Could This Affect Real Estate?

Most real estate transactions continue during a shutdown, but there can be delays depending on the type of financing or assistance involved:

• Conventional loans and many state or local assistance programs: typically unaffected.

• Essential services: like banking, appraisals, title, and escrow, continue as normal.

• FHA, VA, and USDA loans: may experience slower processing if federal staff are furloughed.

• IRS transcripts or Social Security verifications: if needed for loan approval, could face short delays.

  
  

The Bottom Line

Shutdowns can be stressful, but they are not the end of the world for real estate. Many transactions close as planned, and any slowdowns are usually temporary. If you are in escrow, stay in close contact with your lender and agent. Most of the time, your deal keeps moving. We have seen shutdowns before, and the market always pushes through. So take a breath. Your dream home, or your buyer, is not going anywhere just because Congress is gridlocked.