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How a Government Shutdown Impacts the U.S. Real Estate Industry‍

The U.S. government is heading towards the first government shutdown since December 2018, which could have drastic implications for prospective homeowners.
Proof
December 19, 2023

As negotiations slow, the U.S. government is heading towards the first government shutdown since December 2018 as a September 30th deadline to fund the federal government and keep agencies open quickly approaches.

Government shutdowns have broad-ranging impacts on how our government functions and the nation's economy, but shutdowns can be especially challenging for prospective homeowners in the U.S.

Just as catastrophic weather conditions and record-making rainfalls have hit the U.S., the National Flood Insurance Program (NFIP) is set to expire along with the rest of the government’s funding on September 30th.

The NFIP is a federal program that makes flood insurance available to participating communities, currently benefiting close to 5 million property owners in over 20,000 communities, according to the National Association of REALTORS (NAR). Without reauthorization, NFIP cannot sell new flood insurance policies, which can make finding coverage more difficult for many Americans.

While existing NFIP policies will remain in effect, a lapse in the program will impact future home sales that rely on the federal program. According to NAR, failing to reauthorize the NFIP will put at least 1,300 property transactions per day at risk. As mortgage rates continue to rise, placing a strain on the housing market, a lapse in NFIP funding is the last thing American homebuyers need as they plan for their future.

We encourage Congress to take steps to reauthorize the NFIP by funding the government, ensuring home sales can continue and this vital part of the U.S. economy is protected.

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