The Numbers Guy | New England Landmark Realty |

Two-Sentence Summary

Mortgage rates hit 6.09% on January 22, 2026—the lowest level in three years—yet Vermont buyers aren't flooding the market despite inventory rising 11.7%. The disconnect reveals that affordability isn't just about rates: it's about wages, home prices, and property taxes, and understanding that gap changes your strategy whether you're buying or selling.

If You Only Do 3 Things

  • Run your actual payment math at 6.09%—compare it to what you'd pay at 7% (last year) and 5.5% (the rate you're waiting for); the difference might be smaller than you think, and waiting could cost you more in price appreciation than you save in interest.
  • Factor in Vermont's full monthly cost—mortgage + property taxes (which just jumped 12%) + insurance + maintenance; the rate is only one piece of the affordability puzzle.
  • If you're a buyer, act on quality inventory now—Vermont's inventory is up, but well-priced homes in good condition are still moving fast; if you're a seller, understand that buyers are rate-aware but payment-constrained, so pricing and staging matter more than ever.
Vermont home for sale in winter with warm lighting and opportunity for buyers

What Changed (And the One Number That Matters)

On January 22, 2026, Freddie Mac reported that 30-year fixed mortgage rates averaged 6.09%—the lowest level since late 2022. For Vermont buyers who have been sitting on the sidelines waiting for rates to drop, this is the moment they've been asking for. Yet showings haven't surged, and Vermont's inventory—which rose 11.7% in November 2025—continues to climb. Translation: lower rates aren't unlocking buyer demand the way everyone expected.

Here's what the data tells us. Rates peaked above 7.5% in late 2023. They've been trending down for months. Fannie Mae forecasts rates will hover around 6% through most of 2026, potentially sliding to 5.8%–5.9% by year-end.

That's meaningful. A buyer financing $400,000 at 6.09% pays roughly $2,420 per month in principal and interest. At 7%, that same loan costs $2,661—a difference of $241 per month, or nearly $87,000 over the life of the loan.

So why aren't buyers flooding open houses?

The Data (What the Numbers Actually Say)

Three data points explain the disconnect: (1) rates are at 6.09% (Freddie Mac, January 22, 2026), the lowest in three years; (2) Vermont's median home price rose 5.8% in 2025 to $385,000 (Catalyst Realty Collaborative); and (3) affordability is improving but remains tight, with the typical monthly payment representing 29.3% of median household income nationwide (Realtor.com forecast for 2026). In Vermont, property taxes—up an estimated 12% for FY2026—add another $400–$500 per month to the housing cost equation, meaning buyers are payment-constrained even with lower rates.
Data Point 1: Mortgage rates at 6.09%
Source: Freddie Mac Primary Mortgage Market Survey, January 22, 2026
This is the lowest 30-year fixed rate since late 2022. Fannie Mae projects rates will average around 6% through 2026, potentially ending the year near 5.9%.
Mortgage rate chart showing 30-year fixed rates from 2023 to 2026 with current rate at 6.09%
Data Point 2: Vermont median home price rose 5.8% to $385,000
Source: Catalyst Realty Collaborative / Vermont market reports, 2025 data
While rates dropped, home prices kept climbing. That means buyers gained ground on interest costs but lost ground on purchase price. Net effect: affordability improved modestly, but not dramatically.
Data Point 3: Vermont property taxes up an estimated 12% for FY2026
Source: Vermont Department of Taxes / Valley News, December 2025
Average Vermont property tax: approximately $4,859 per year (SmartAsset). A 12% increase adds roughly $583 annually, or about $48 per month. On a $400,000 home, that's equivalent to losing $8,000–$10,000 in buying power at current rates.

Let's run the numbers. A buyer purchasing a $385,000 Vermont home (the current median) with 10% down finances $346,500. At 6.09%, the monthly principal and interest payment is approximately $2,095. Add property taxes ($405/month average), insurance ($150/month estimated), and a 1% annual maintenance reserve ($320/month), and the total monthly housing cost is roughly $2,970.

At 7% rates, that same buyer's P&I payment would be $2,304—about $209 more per month. The rate drop helps. But if that buyer was stretching at 7%, they're still stretching at 6.09%. The rate improvement didn't create a flood of new qualified buyers. It gave existing qualified buyers a better deal.

So What Does That Mean for Vermont?

Vermont's inventory rose 11.7% in November 2025—the biggest gain since 2022—yet prices continued rising 5.8% through year-end. That suggests demand is still strong enough to absorb new supply, but buyers are selective. Well-priced, well-staged homes in desirable Central Vermont towns are still moving quickly, while overpriced or neglected listings sit. For buyers, this means lower rates create opportunity but not urgency; for sellers, it means you're competing on quality and price, not just riding a rate-driven wave.
Vermont home buyers reviewing mortgage calculations and affordability analysis at kitchen table

Math doesn't care. Vermont buyers have been waiting for rates to drop. Rates dropped. But affordability is a function of four variables: income, home price, interest rate, and monthly obligations (taxes, insurance, debt). Rates improved. Prices didn't fall. Taxes rose. Wages grew modestly.

Translation: if you were priced out at 7% rates, you might still be priced out at 6.09%—unless your income rose or you adjusted your price range. And if you were barely qualified at 7%, you're now comfortably qualified at 6.09%, which means you can compete more effectively.

Here's the Vermont-specific wrinkle. Central Vermont's housing stock is older, quirky, and often requires updates. Buyers at 7% rates were skipping homes that needed work because their payment didn't leave room for renovations. At 6.09%, some of those buyers now have breathing room—but only if the home is priced to reflect its condition.

For sellers, this means staging and pricing matter more than ever. Buyers have more inventory to choose from. They're not desperate. They're deliberate. If your home photographs poorly, feels incomplete, or is priced like it's still 2023, they'll move on to the next listing.

Bottom Line

Lower rates help, but they don't solve affordability on their own. If you're a Vermont buyer waiting for 5% rates, you might wait years—and prices could rise enough in the meantime to wipe out any interest savings. If you're a seller expecting a rate-driven buying frenzy, adjust expectations: buyers are active but selective, and your listing needs to compete on quality and price, not just hope.

Here's the play if you're buying. Run your payment math at 6.09%. Compare it to what you'd pay at 5.5% (the rate you're hoping for). If the difference is $100–$150 per month, ask yourself: is it worth waiting 12–18 months for that savings if home prices rise another 3%–5%? On a $385,000 home, a 4% price increase ($15,400) costs you more than two years of interest savings.

Here's the play if you're selling. Price your home based on current market conditions, not where rates were six months ago. Invest in staging and photography that show your home at its best. Understand that buyers at 6.09% can afford more than buyers at 7%—but they're also comparing your listing to a growing number of alternatives.

Real affordability checklist showing mortgage payment, property taxes, insurance, and total monthly housing costs

The opportunity is real. Rates are lower. Inventory is higher. Affordability is improving. But the market isn't frenzied—it's balanced. That means disciplined buyers and prepared sellers win.

Let's Run Your Numbers

If you're trying to decide whether to buy now or wait, or if you're selling and want to understand what buyers can actually afford in today's Vermont market, let's talk. I'll walk you through the payment math, show you what's moving (and what's sitting), and help you make a decision based on data, not hope.

Tony Walton, Principal Broker
New England Landmark Realty (NELR)
Office: (802) 253-4711 or (866) 324-2427
Cell: (802) 233-4107
nelandmark.com

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