Realtors Say the Government Shutdown Is Sinking Home Sales

(Bloomberg) -- The U.S. housing market, already losing steam, is taking another hit from the government shutdown, delaying closings and damaging buyer confidence, according to a National Association of Realtors survey.

About 20 percent of 2,211 agents surveyed by the group said they had clients who were impacted in some way by the shutdown that began on Dec. 22, the organization said today.

Among those that reported problems, 9 percent said clients who were federal employees had held back from buying, while 25 percent said buyers pulled out simply because of “economic uncertainty,” according to the report. Of those, about half had closings delayed or canceled because customers’ mortgages were backed by the Federal Housing Administration, U.S. Department of Veterans Affairs or the U.S. Department of Agriculture.

“It’s a completely unnecessary negative,” National Association of Realtors Chief Economist Lawrence Yun said in a phone interview. “If the shutdown quickly ends, then this will not become an issue. If it becomes prolonged, then it will hurt the economy."

To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Rob Urban

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