What a Government Shutdown Means for the Massachusetts Housing Market | MA Real Estate Insights

There’s been a lot of talk lately about how a government shutdown impacts the housing market in Massachusetts. You might be wondering: Does it mean everything grinds to a halt?

The short answer: No.

The Massachusetts housing market doesn’t stop. Homes are still being bought and sold, contracts are still being signed, and closings are still happening. While some parts of the process might slow down a little, the overall real estate market in MA continues to move forward.

🔍 What Typically Happens During a Government Shutdown

When the government shuts down, some federal agencies temporarily close or reduce operations, which can cause hiccups in certain real estate transactions—especially those involving government-backed loans or insurance programs.

According to Selma Hepp, Chief Economist at CoreLogic:

“Applicants for FHA, VA, or USDA loans—which account for about one-quarter of all mortgage applications—may encounter significant processing delays due to agency furloughs.”

Similarly, Zillow reports:

“By recent estimates, more than 2,500 mortgage originations per working day are at risk of delays during a shutdown.”

In addition, flood insurance approvals may be paused if the National Flood Insurance Program (NFIP) is temporarily affected, which can delay closings in flood-prone areas such as parts of Cape Cod, Plymouth, and coastal Massachusetts.

Even with these challenges, most real estate transactions still go through. Buyers keep buying, sellers keep selling, and agents keep guiding clients toward successful closings.

📈 The Market Usually Bounces Back Fast

We’ve seen this pattern before. During the 2018–2019 government shutdown, which lasted 35 days, home sales dipped slightly — but quickly rebounded once the government reopened.

Data from the National Association of Realtors (NAR) shows that existing home sales slowed for about two months but surged back as delayed closings caught up.

This temporary slowdown wasn’t part of the usual seasonal cycle. The sharper, shorter drop in activity lined up almost exactly with the shutdown period, and once it ended, sales bounced right back — especially in active markets like Greater Boston, Worcester County, and the North Shore.

💡 What This Means for Massachusetts Buyers and Sellers

If you’re in the middle of buying or selling a home in Massachusetts, don’t panic. Most deals will still move forward — even if they take a few extra days.

As Jeff Ostrowski, Housing Market Analyst at Bankrate, explains:

“If you’re expecting to close in a week or a month, there could be some slight delay, but for most people, it’s probably going to be a blip more than a real deal killer.”

For buyers just starting out, this moment can even offer a unique advantage. Some people may hold off due to uncertainty, giving well-prepared buyers less competition and more room to negotiate — particularly in competitive areas like Boston, Cambridge, or Newton.

For sellers, staying active during a slowdown can be strategic. When inventory tightens and other sellers pause, your listing stands out more, especially if priced right.

🏡 Bottom Line

A government shutdown may cause temporary delays for certain buyers or loans, but it doesn’t derail the housing market — especially not in a resilient state like Massachusetts. The last time this happened, home sales rebounded quickly once the government reopened.

If you’re unsure how this could affect your real estate plans in MA — whether you’re buying in Boston, selling in Worcester, or investing in Cape Cod — let’s connect. Together, we can create a strategy that keeps your goals on track, no matter what’s happening in Washington.