(NewsNation) — The government shutdown has stalled flood insurance renewals, threatening home sales and existing homeowners in areas with high flood risks.
The stalemate, which has entered its third week, has thrown millions of Americans into limbo amid hurricane season, with the National Flood Insurance Program on hold as Congress remains gridlocked.
Homeowners and buyers are unable to renew or buy flood insurance through the program, leaving millions exposed in flood-prone states like Florida, Texas and the Carolinas.
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Through FEMA, the program covers about 4.7 million policies nationwide and protects more than $1.3 trillion in property. No state depends on the program more than Florida, with nearly 1.8 million policies — more than one-third of all coverage in the country.
Lenders also can’t close on homes without flood insurance. The National Association of Realtors estimated a similar freeze in 2010 stalled about 1,400 closings a day.
A recent report from mortgage lender HomeAbroad estimated more than 3,600 sales could be at risk daily, with billions in deals already on hold.
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Anthony Smith, a senior economist at Realtor.com, told NewsNation the delay could further shake an already volatile housing market.
“What we will see is that if this really lasts longer and longer, that there’s going to be a significant backlog,” Smith said. “Beyond that, it’s also going to be impactful to consumer confidence, and this is going to bring some more cooling effects to an already chilly housing market.”
Private coverage is an option in major cities and coastal areas, but inland homeowners have far fewer choices if a major storm hits.
Buyers relying on programs under the Federal Housing Administration and the Department of Agriculture — key lifelines for first-time and rural homebuyers — are also on pause as federal staff remain furloughed, which can stop a sale from closing altogether.
