However, the gears may shift if the shutdown drags out. Many lenders who are currently waiving things like impact verification through the IRS are using their own capital to originate loans. This is only a quick fix, as many of them will soon run out of capital. Other lenders are delaying mortgage approvals, while still others are flat-out refusing new applications.
Additionally, if interest rates continue rising based on the fear of a debt default, sales may suffer, and anxiety about the state of the economy overall may stall potential buyers from moving forward with their house hunt. If borrowers can’t secure mortgages, sales will slow and prices could plummet.
“With each passing week, the negative impact to housing market will intensify,” Yun says.
