How the Government Shutdown Is Affecting the Housing Market

Nichole Ehrbar
Oct 31
3 min read

The government shutdown continues, and it’s starting to show up in the housing market — especially in metro areas with a large number of federal workers. In October, buyer activity and new listings both slowed last month as some households hit pause amid all the uncertainty.

Market Cooling, Not Crashing

Nationwide, the housing market is still stable, but the pace is cooling. Active listings are up more than 15% compared to last year, yet homes are taking longer to sell — averaging longer than a year ago. Pending sales are also down slightly, about 2% year over year.

Prices haven’t moved much. The median list price held nationally around $424,000, which is roughly the same as last year, but price growth is clearly losing steam. Buyers have more options now, and they’re taking their time instead of rushing into offers.

Shutdown Impact

The slowdown is most noticeable in areas with high concentrations of federal employees. When paychecks are uncertain, it’s only natural for both buyers and sellers to take a “wait and see” approach.

For now, the changes look more like hesitation than a full market shift. But if the shutdown drags on, the effects could deepen.

The Ripple Effects of a Prolonged Shutdown

Even in markets that aren’t heavily tied to federal jobs, the shutdown creates real challenges for homebuyers:

Government-backed loans (like FHA, VA, and USDA) could face delays, slowing down closings.
Flood insurance approvals through federal programs may stall, especially in coastal areas.
Economic data freezes mean lenders and investors have less information to gauge the market, which can affect rates and lending decisions.

In short, the longer the government remains closed, the more friction builds in the homebuying process.

Attention Buyers and Sellers

For sellers:

If you’re listing right now, be prepared for a little more patience. The market isn’t crashing — it’s just moving slower. Well-priced, move-in-ready homes are still selling, but buyers are being more selective.

For buyers:

This could be a good time to take advantage of increased inventory and less competition. Just be sure to check in with your lender early to make sure your financing isn’t affected by any government-related delays.

For agents and professionals:

Stay close to your local market data. What’s happening nationally may not fully reflect your area, but understanding buyer sentiment and days on market trends can help you guide your clients confidently.

The Bottom Line

So far, this looks like a pause, not a panic. The government shutdown is definitely cooling demand in some regions, but most of the country’s housing markets are still steady. If the shutdown continues, though, we could see more lasting effects — particularly around financing and buyer confidence.

For now, it’s a good reminder that real estate always responds to uncertainty — and those who stay informed and flexible will be best positioned to adapt.

About Nichole Ehrbar

Nichole Ehrbar is a Realtor® with ZT Real Estate, specializing in Hawai‘i’s diverse real estate market. Known for her deep local insight and commitment to helping families find their place in paradise, Nichole guides clients through every step of the buying and selling process with care, clarity, and Aloha.

Let’s connect: If you’re thinking about making a move or have questions about Hawai‘i’s market trends, Nichole is happy to help!

Nichole Ehrbar

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