The Times spoke to a New Jersey resident who lost his job with the U.S. Forest Service. With a monthly mortgage payment of about $2,700 and an expected wait time of months before finding a new job in the environmental sector, the man said that even with unemployment benefits, he’ll be forced to sell his home.
Dan Binowitz, managing director of mortgage servicing for loanDepot, told HousingWire that it “may be too soon to determine the impact of federal workforce reductions.” He said that the number of loanDepot customers who cite unemployment as the cause of a serious delinquency (payments that are at least 90 days past due) has been stable since the start of the year.
Since Trump returned to office on Jan. 20, about 200,000 federal employees have had their positions eliminated, according to ABC News, while another 75,000 accepted “buyout” offers that will reportedly allow them to be paid through September 2025.
Although many of these positions involve probationary employees who have been employed for less than a year, an escalation in workforce cuts is expected.
A Trump memo that circulated Wednesday called for most federal agencies to begin eliminating more jobs immediately, with proposals due in mid-March. A second phase that involves “long-term reorganization and strategic transformation” for these entities calls for proposals by mid-April and implementation by the end of September.
According to a 2024 report from the White House Office of Management and Budget (OMB), there are about 2.28 million civilian employees in the federal workforce. About 20% of them live in the Washington, D.C., area. And speculation is swirling that the mass layoffs will result in a surge of new listings.
Altos Research data showed 340 newly listed homes in the D.C. area during the week ending Feb. 18, near the low point since the start of 2022. There was little evidence that panicked sellers in D.C. were listing their properties at a discount, as the 26.8% share of listings with a price cut there was well below the national average of 33%.
“This doesn’t mean we won’t see stressed sellers as federal workers lose their jobs in the upcoming weeks, but the recent data does not indicate any significant stress in the market yet,” HousingWire Lead Analyst Logan Mohtashami wrote.
Bright MLS reported that new listings in D.C. were up 20% from the prior week and 13% higher than a year ago for the week ending Feb. 23. These figures far outpaced the growth rates of 7.4% and 3.6%, respectively, for the six Mid-Atlantic region states covered by the MLS.
“It is likely that the federal workforce changes will have an impact on the region’s housing market,” Bright MLS chief economist Lisa Sturtevant wrote. “Some workers who have been laid off or who are enduring long commutes will be evaluating their housing options. However, the decision to sell a home or move is not one people take lightly, and it may be several weeks or even months before we know how the housing market will be affected.”
Mortgage delinquencies are still low by historic standards. In November 2024, a spate of natural disasters — most notably hurricanes Helene and Milton that struck the Southeast in the fall — pushed late-payment rates to a three-year peak, according to ICE Mortgage Technology.
But more recent data from the Mortgage Bankers Association showed that delinquency rates on all mortgaged residential properties (less than five units) rose to nearly 4% last year. And delinquencies are growing much more quickly in the government lending segment as Federal Housing Administration (FHA) loans and U.S. Department of Veterans Affairs (VA) loans had past-due shares of 11% and 4.7% at the end of 2024.
Binowitz urged borrowers who are struggling to make their mortgage payments for any reason to contact their servicer immediately. Loss-mitigation options vary depending on the guarantor or investor that owns the note, as well as any applicable laws at the state level.
“The most common option offered is a 90-day forbearance, allowing you to pause payments for three months,” Binowitz said. “However, you will need to repay the deferred amounts when the forbearance ends. Your individual situation will ultimately determine your disposition and whether you can reinstate under the original terms. If not, other long-term options — such as loan modifications, deed-in-lieu agreements, or short sales — may be available.”
First Time Home Buyer FAQs - Via HousingWire.com
