How a Government Shutdown Impacts the Real Estate Market — and What It Means for Buyers and Sellers

As talk of the government shutdown continues to dominate the headlines, many homebuyers and sellers are wondering what it means for the housing market. The truth? While the economy may feel uncertain, the housing market remains resilient — but there are key factors to watch that could affect momentum in the weeks ahead.

Government Shutdown: What’s Happening

A government shutdown occurs when Congress fails to approve funding for federal agencies. While essential services continue, many nonessential operations pause, creating ripple effects across the economy. According to OriginationPro, the latest funding standoff could stall key housing programs, delay certain verifications, and complicate Federal Reserve rate decisions due to missing data.

Still, experts say the impact on the day-to-day buying and selling process is minimal. Loan applications are still being processed, lenders are still funding purchases and refinances, and home closings are moving forward as planned. FHA and VA loans continue to be funded, and USDA loans already approved will also close and fund.

In short — the housing market doesn’t shut down just because the government does.

Real Estate Recovery Faces Mixed Signals

The timing of this standoff comes as the U.S. housing market is already navigating shifting conditions. Domestic home sales have fallen year-over-year in six of the past eight months, marking one of the slowest selling seasons in over a decade. High mortgage rates and affordability challenges have kept many Americans on the sidelines.

At the same time, foreign buyers are re-entering the market in a big way. According to the National Association of Realtors (NAR), sales of existing U.S. homes to international buyers totaled $56 billion in the year through March 2025 — a one-third increase from the previous year. Many of these buyers are paying cash, taking advantage of a weakened U.S. dollar and reduced competition from domestic buyers.

“U.S. real estate has traditionally been viewed as a safe investment,” explains Mike Chambers, CEO of Ridley. “Rather than discouraging buyers, current economic conditions — including a softer dollar — have made the U.S. market even more attractive to foreign investors.”

What This Means for Buyers and Sellers

For buyers: while interest rates remain elevated, stability may be on the horizon. Redfin projects housing costs could normalize by 2030 if rates drop to around 5.5%. That could mean more balanced affordability in the coming years — though “normal” prices will still vary widely by region.

For sellers: foreign investor interest could help sustain demand even as U.S. buyers pull back. Well-priced homes in desirable areas remain in demand, especially among all-cash buyers.

For renters and downsizers: shifting demographics continue to reshape the market. Over the past decade, the number of renters aged 65 and older has jumped by nearly 30%, according to Point2Homes. Many seniors are choosing renting for flexibility, cost predictability, and reduced upkeep — a trend expected to grow as mortgage rates stay high.

What This Means for New York’s Capital Region

Here in the Capital Region, we tend to see a more balanced and steady housing market, even when national headlines sound uncertain. While some buyers may take a “wait and see” approach during times like this, motivated sellers and serious buyers continue to find great opportunities. Whether you’re considering a move, exploring investment options, or just want to understand how these broader trends might affect your neighborhood, this is still a great time to connect and make a plan.