The ongoing U.S. government shutdown is jeopardizing home sales, particularly in flood-prone areas, as the National Flood Insurance Program (NFIP) suspends services amid the funding lapse. According to a report by real estate investment platform HomeAbroad, thousands of home closings nationwide are at risk, with billions in potential economic losses.

HomeAbroad data shows that approximately 3,619 daily home closings could be delayed, representing $1.59 billion in lost transactions based on the current $439,278 median home price. If the shutdown lasts two weeks, around 50,658 closings could be affected, equating to $22.27 billion in potential losses. A month-long shutdown could jeopardize 108,570 home sales, totaling an estimated $47.68 billion, with prolonged interruptions potentially impacting over 126,000 transactions and $55 billion in market activity.

Michele Lawrie, a real estate consultant at HomeAbroad, described this as “the largest potential disruption to the U.S. housing market from a single policy intervention in recent history,” stressing that the impact extends well beyond individual homebuyers.

The housing sector, already challenged by high mortgage rates due to Federal Reserve interest hikes, faces further uncertainty. Although mortgage rates have slightly declined as the Fed reduced borrowing costs last month, economic uncertainty, including a weak labor market, has sidelined many prospective buyers.

States most affected include Maryland, Virginia, North Carolina, and Florida, where high flood insurance penetration rates leave home sales particularly vulnerable. The NFIP suspension prevents new insurance coverage in these high-risk areas, effectively stalling property transactions until the shutdown ends.

As political deadlock continues in Washington between Republicans and Democrats, the housing market remains in a precarious position, with millions of prospective homeowners and billions in real estate transactions hanging in the balance.