US Government Shutdown Weighs on Housing Market and Buyer Confidence

The ongoing federal government shutdown, now in its fifth week, is dampening housing market activity and making real estate data—particularly for new-home transactions—harder to track, Real Estate News reported (10-24-25).

Despite 30-year mortgage rates falling to their lowest level in over a year, buyer activity has slowed noticeably. Weekly pending sales data show that the shutdown is making buyers more cautious, according to Dave Crosby, chief data and analytics officer at Compass. During an October 20 presentation on the firm’s weekly real estate report, Crosby said pending sales have slipped behind last year’s pace for the first time in months, although he noted the dip could be temporary.

Real Estate News reported that delayed closings and a broader housing slowdown are being felt differently across the country. A recent study found that when real estate was measured as a share of gross state product, Florida, Delaware, and Arizona topped the list, while Washington, DC, Nebraska, and Iowa ranked lowest.

Economists are watching the DC market closely, Real Estate News added, since it is home to thousands of furloughed workers. According to Bright MLS, new listings during the week ending October 19 were up 8.6% from a year earlier, while the median list price was $575,000, nearly unchanged from this time last year.

Bright MLS Chief Economist Lisa Sturtevant said, “The more [workers] miss paychecks, the more likely we are to see further growth in listings, fewer buyers, and softer price growth or even price declines. For buyers not impacted by the shutdown, the upside will be more choices and more room to negotiate on price and concessions during this shifting market.”