Month-Long Shutdown Disrupts Housing, Halts Flood Insurance

The month-long federal government shutdown is disrupting U.S. housing markets by halting paychecks and key federal programs, causing loan delays, stalled home closings and reduced buyer activity—especially in metros with high concentrations of federal workers such as Washington, D.C., Virginia Beach, Oklahoma City and Baltimore. FEMA’s National Flood Insurance Program has stopped issuing new policies and renewals during the shutdown, blocking closings in designated flood zones and putting thousands of home sales at risk in Texas and other markets. Federal lending and verification channels — including USDA, VA and FHA processes and IRS-related checks — are paused or slowed, creating weeks-long hold-ups that force some buyers to extend escrows or lose deals. Housing-assistance programs are affected: Georgia’s Department of Community Affairs warned it will issue partial, prorated November Housing Assistance Payments to landlords until HUD funding resumes and reiterated that landlords may not evict tenants over delayed voucher payments. Realtor.com data show fewer new listings and declining buyer searches in government-heavy metros as uncertainty around paychecks weighs on confidence, signaling localized early market softness even as broader trends remain steady. Experts advise seeking private flood insurance where available, writing longer escrow timelines and monitoring agency updates while existing FEMA claims and certain tenant protections remain in effect.