Mortgage professionals flag risks from shutdown, but don’t see a sharp hit to housing outlook
The federal government’s shutdown Wednesday sparked fears of economic volatility, disruption to services and even potentially mass layoffs.
But while that could have implications for the housing and mortgage sectors, an industry expert is urging brokers to stay calm—and still thinks a sharp economic downturn is unlikely as a result of the shutdown, at least for now.
“If you look at it just from a macro perspective, I don't think that this is going to be huge for the economy one way or the other. It's going to be kind of a blip when you look at it on the macro,” Glen Weinberg of Fairview Commercial Lending told Mortgage Professional America.
That’s not to say the housing and mortgage markets will see no impact, with homebuyers’ confidence potentially facing a hit if the crisis rumbles on.
“If you look at the housing market, you can even look at our market here in Colorado. It's soft. It's extremely soft,” Weinberg said. “So when you get any uncertainty, that doesn't help the market whatsoever.”
But he noted that while the headlines may be alarming, the underlying fundamentals of the treasury and mortgage markets remain relatively stable.
“Mortgage rates I don't see as a big issue. Conventional lenders, obviously, you're going to have Fannie, Freddie impacts. Who knows on the IRS,” he said. “It's not like they have profound service to start with. I doubt it's going to get any better.
“So there's definitely downside risk on validating and stuff like that. If there are areas with a lot of government employees, they'll take a bigger hit than others with the furloughed, because… if someone's furloughed, they don't want to go buy a house. They don't know if it's going to be seven days or 40 days without a paycheck. So there is some risk."
‘The bigger concern is the ripple effect’
While the shutdown may create pockets of disruption—particularly in regions with a high concentration of government workers—Weinberg believes the broader market is likely to weather the storm. The key for brokers is to maintain perspective, communicate openly with clients, and avoid making hasty decisions based on fear or speculation.
The impact on loans that depend on federal agencies, like FHA or VA loans, is being closely watched by other industry members. Stacia Weishaar, senior loan officer at Delightful Refuge, highlighted possible closing delays for those loan types.
“But the bigger concern is the ripple effect,” she said. “When workers face furloughs or missed paychecks, it impacts household income, confidence, and cash flow across the economy. That uncertainty can make it harder for families to qualify for a mortgage or feel comfortable taking on new debt.”
Housing, mortgage markets rarely take a big hit from shutdowns
Past shutdowns—including the 16-day closure in 2013 and the record 35-day shutdown in 2018–19—show that while long-term national housing metrics may remain resilient, local markets experience real pain. But this time, the combination of stalled deals and fragile borrower confidence could exacerbate those localized shocks.
Still, Paula Nirschel, VP at Elevate, said there is virtue in planning for the long term and not be swayed by political back-and-forth. “Confidence grows when buyers stay focused on the goal, not the noise,” she told MPA. “It’s our job as loan officers to be proactive with communication so they feel supported every step of the way.”
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