A Debt-Ceiling Crisis Would Hit The Housing Market Like A Hurricane

Natural disasters like hurricanes and snowstorms tend to temporarily halt housing market activity in affected areas. If the U.S. hits the debt ceiling, expect a similar effect on homebuying and selling activity, particularly in areas with a large number of people who are paid by the government.

If the United States breaches the debt ceiling, it would hit the housing market like a natural disaster. Whenever there is a major weather event, like a hurricane or snowstorm, the places directly in harm’s way see a steep decline in home selling and buying activity. For example, in October 2022, the number of homes that accepted an offer plummeted by over 50% year over year in the three Florida metros directly hit by Hurricane Ian, double the national decline. However, those markets mostly recovered by the new year. Hitting the debt ceiling would have a similar effect on the housing market. Home sellers and homebuyers would temporarily back off the market during the turmoil but would return once the dust settles.