It’s bound not to be good news, but it’s important to know how bad the news is and why. At this point, most experts agree that the shutdown has caused more fear than actual harm, but if this continues that could soon change.
If you have ever gone through a real estate transaction, and certainly recently, you know how much paperwork is involved. Thus far, mortgage lenders and title have found ways to keep things running fairly smoothly, but with the Federal Housing Authority running on a severely restricted staff and the IRS unable to provide financial documents agents need to close transactions, things are going to get trickier. Along with the potential for failed closings due to inability to obtain necessary documents from government entities, with Fannie Mae & Freddie Mac unavailable, banks are using their own capital and they can only continue to do this for so long.
However, since the last government shutdown lasted only 21 days, there is little we can surmise about what would happen to the market should this one continue for an extended period of time. Again and with all of this said, for now the shutdown is having more of a mental impact on people than a concrete one. However, with the past fragility of the market and the encouraging rebound we’ve been seeing of late, the sooner everyone gets back to work, the better. So keep calm, carry on, and cross your fingers.