The federal government shutdown has suspended the National Flood Insurance Program, putting thousands of real estate transactions at risk. Industry leaders warn the halt could derail about 1,400 home sales daily across more than 22,000 communities, HousingWire Media’s Jonathan Delozier reports.
The American Land Title Association told HousingWire Media, “NFIP’s stability is critical to keeping the market moving. Real estate transactions are especially vulnerable during a government shutdown.”
National housing impact from NFIP suspension
The National Association of Realtors reports the NFIP supports roughly half a million home sales annually. This generates 1 million jobs and $70 billion for the U.S. economy.
Shannon McGahn, NAR’s chief advocacy officer, told HousingWire, “Each day of the shutdown impacts America’s housing market. This sector accounts for nearly 20% of the U.S. economy.”
Without congressional action, more buyers and sellers in flood-prone areas could face:
Canceled closings
Higher premiums from lender-placed coverage
Lost financing
Florida pending home sales in limbo
Florida’s housing market faces particular exposure to the NFIP lapse. As of Sept. 26, 2025, HW Data shows the state had 28,149 pending single-family homes with a $425,000 median price. Pending homes move in a median of 77 days. Many transactions now face delays without flood insurance coverage.
Florida’s broader market includes 97,273 active listings with a $484,900 median price. Homes average 91 days on market, with 3.1 months of inventory.
Why it matters for Florida buyers and sellers
Florida leads the nation in flood exposure, with the highest number of NFIP policies in force. A prolonged shutdown could freeze transactions in coastal counties requiring coverage. This would further strain an already tight housing market.
Understanding the NFIP’s role
The NFIP, managed by FEMA, provides flood insurance to property owners, renters and businesses. It aims to reduce the socio-economic impact of floods. The program covers over 5 million policyholders nationwide.
Lenders typically require flood insurance for mortgages in high-risk flood areas. Without NFIP coverage, many buyers can’t close on their homes. This affects not just coastal areas, but any region prone to flooding.
The program’s suspension highlights its crucial role in the housing market. It underscores the need for long-term reauthorization to ensure market stability and protect homeowners in flood-prone regions.