The government has been fully shut down for nearly a month, and the ramifications involving Texas’ housing market could be severe. According to a new study, 40% of home closings across the Lone Star State could be at risk this month due to interruptions to a federal insurance program, and bottlenecks at the IRS and stoppages at federal mortgage lender programs could further exacerbate the problem.
Home Abroad Inc. predicts that by the end of the month, nearly 10,000 home closings will have been affected by the shutdown due to buyers’ sudden inability to obtain federal flood protections. The brunt of that impact is being felt in Harris County, where 51% of buyers in the coastal region are required to purchase flood insurance before a deal can close. Federal flood insurance is often significantly more affordable than private policies, but the government-backed program that writes those policies has been out of office since Oct. 1.
Flood insurance can be required in landlocked areas, too, and an analysis of August 2025 home sale data and FEMA flood risk maps showed that North Texas’ housing market will likely be hurt. The next most at-risk counties are Tarrant and Dallas, where 42% of home sales are at risk of falling through. Combined, those markets are seeing 51 newly-affected home sales each day, and 1,539 sales will have been affected by the end of the month…