E
ntering its third week, the federal shutdown continues to ripple across the nation. While all states feel the strain, some are hit harder. Economists estimate the shutdown costs $400 million daily. Roughly 900,000 federal employees are furloughed, and 700,000 are working without pay.

    HUD layoffs have cut fair‑housing and public‑housing offices, shrinking field presence nationwide. Mortgage processing stalls as IRS, FHA, and VA staff shortages pile up, and the USDA has halted all loan applications.

    Virginia and Maryland suffer most from lost federal jobs and contract dollars, whereas five states—Florida, Delaware, Arizona, Hawaii, and Nevada—experience the sharpest decline in real‑estate activity. These states rank highest in real‑estate’s share of gross state product (GSP). The National Association of Realtors (NAR) notes that real‑estate accounts for nearly 20% of the U.S. economy, and each day of uncertainty threatens programs that help buyers, sellers, and owners.

    Washington, D.C., tops the list of overall impact, yet ranks last for real‑estate contribution. About 25% of D.C.’s workforce is federal, the highest share nationwide, leaving many residents unpaid. Real‑estate there contributed $18.2 billion or 10.4% of its GSP in 2023. Early layoffs prompted some workers to sell homes and relocate; further furloughs could trigger another exodus.

    Florida’s real‑estate sector alone represented $381.4 billion, 24.1% of its GSP in 2023—the largest share of any state. With mortgage processing slowed, the state’s economy could feel a noticeable drag. Realtor.com senior economist Anthony Smith warned that even a modest pullback in buyer activity could shift national sales and inventory metrics.

    Hawaii’s real‑estate market accounts for 23% of its GSP, $24.8 billion, making it the second most affected state. Arizona, Delaware, and Nevada also rank high, though their GSP shares are slightly lower.

    NAR’s Executive Vice President Shannon McGahn emphasizes that each additional day of uncertainty threatens programs that help buyers, sellers, and property owners navigate an already challenging market. The full impact of HUD layoffs—442 employees, many from the Fair Housing and Equal Opportunity division—will not be felt until the government reopens. Congresswoman Maxine Waters condemned the firings as “cruel, dangerous, and disgraceful,” noting that they weaken an agency millions rely on.

    The shutdown’s duration remains unclear, but the housing industry’s future hangs in the balance as each day passes.