Now in its 38th day, the ongoing government shutdown has left many facets of American society in an uncomfortable holding pattern, with hundreds of thousands of workers furloughed, more than 4,000 federal staffers laid off, airports ensnarled by air traffic controller shortages, and the fate of federal food assistance programs in limbo.
Against that backdrop, a recent Redfin survey suggests that even people not directly impacted by the government gridlock may be less likely to make a major life decision, such as purchase a home.
According to the survey, conducted Nov. 3-4, 45% of respondents said they are less likely to make a major purchase, such as a home or a car, due to the shutdown. That figure stood at 21% in early October at the start of the congressional impasse.
Perhaps more alarmingly, the percentage of survey respondents who said they are “much less likely” to make a major purchase doubled over that period, from 14% to 28%.
More broadly, 46% of respondents said the shutdown has negatively impacted their life, while 35% said their finances have suffered since Oct. 1.
A consumer sentiment survey released by the University of Michigan on Friday offered a similarly bleak outlook from Main Street.
The university’s index of consumer sentiment fell 6% from October and nearly 30% year over year, with responses reflecting growing concerns about the economic fallout from the government dormancy.
“With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” observed Joanne Hsu, director of Surveys of Consumers at the university.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), noted in a statement released Friday that the association and its member companies “are assisting consumers affected by the ongoing government shutdown, including helping homeowners navigate disruptions, offering forbearance, and helping to ensure access to critical housing and mortgage services.”
But the MBA leader also expressed concerns about the housing-related impacts of the shutdown, such as the lapsed funding for the National Flood Insurance Program (NFIP), the largest issuer of flood insurance policies nationwide.
When NFIP funding previously lapsed in 2010, more than 1,400 home sale closings were canceled or delayed each day, according to a study published in the Environmental Claims Journal.
“We urge lawmakers to set aside their differences and pass a clean resolution swiftly that extends the National Flood Insurance Program’s authorities and reopens the government,” Broeksmit stated. “A prompt resolution is essential to ensuring stability for homebuyers, homeowners, renters, and the broader housing market.”
