As of this writing, the partial government shutdown affecting 25% or some 800,000 federal employees and contract workers continues to drag on as the longest federal shutdown on record.
Some 41,000 law enforcement officers are affected, some 52,000 IRS workers, 96% of NASA employees and other “non-essential” Department of Homeland Security workers, air traffic control workers, FHA workers, VA workers, FDA workers, the national parks services, etc. are either working without pay or are furloughed.
Currently, in terms of real estate functioning, things are working. Applications for conventional home mortgage financing by Fannie Mae and Freddie Mae are being processed; applications for federally backed FHA and VA home loans are being processed; and, the IRS is back to processing income verification requests for the issuance of federal flood insurance.
Longer term, however, the shutdown effects on real estate could be significant, according to Lawrence Yun, chief economist with NAR. “This is fundamentally an issue of confidence, People are concerned about the direction of the economy and the perception of a chaotic environment…What we’re going through is not helping people make firm decisions for a major expenditure like a home purchase.”
WalletHub, an online personal financial website, surveyed 50 states and the District of Columbia to determine which states are most affected by this shutdown. WalletHub sourced data from the Unites States Census Bureau, the US Bureau of Labor Statistics,usasspencing.gov, the National Association of REALTORS®, and the National Park Service for this research.
10 Most Affected States 10 Least Affected States
- District of Columbia 1. Minnesota
- New Mexico 2. New Hampshire
- Maryland 3. Nebraska
- Hawaii 4. Iowa
- Virginia 5. Indiana
- West Virginia 6. Wisconsin
- Mississippi 7. Kansas
- Alabama 8. New Jersey
- Arizona 9. North Dakota
- Rhode Island 10. Ohio
Highest Share of Federal Jobs
- District of Columbia, Hawaii and Maryland all tie for first place.
Highest Share of Federal Contract Dollars Per Capita
- District of Columbia, Maryland and Virginia all tie for first place.
- New Mexico
Gross State Product is the equivalent of GDP but at the state level. Real estate as an income generating percentage to the individual Gross State Product and mortgage processing will be affected by staffing shortages at the IRS, VA and FHA.
Highest RE as % of GSP Lowest RE as % of GSP
- Hawaii 1. SD, IND & OK tied
- Maryland 2. Nebraska
- Florida 3. District of Columbia
- New Jersey
- CA & CO tied