On October 1, 2025, the U.S. federal government officially shut down after lawmakers failed to reach a deal to fund operations. The shutdown affects a wide range of federal agencies and services, many of which are relevant to the residential real estate market. One immediate impact is the lapse in authority for the National Flood Insurance Program (NFIP), which prevents new or renewed flood insurance policies from being issued. This directly affects home closings in flood zones, including parts of the St. Louis region where flood insurance is mandatory for federally backed loans.
While Fannie Mae and Freddie Mac continue operating because they are not dependent on annual appropriations, other parts of the mortgage process are already seeing slowdowns. IRS income transcript services, used by lenders for verification, may be delayed or unavailable. FHA and VA loans, which are used in many first-time buyer transactions, may also be delayed due to limited staffing at those agencies. If the shutdown drags on, the cumulative effect could cause delays in closings, increased buyer uncertainty, and a slowdown in overall transaction volume, particularly in markets like St. Louis where FHA and VA loans represent a significant share of activity.
If the shutdown is short, the damage may be minimal. But if it continues, homebuyers, sellers, lenders, and agents in St. Louis could be dealing with real consequences, from delayed deals to dropped contracts, in the weeks ahead.
