By New England Landmark Realty LTD

Vermont Mortgage Rates May Climb Higher

Trump’s anticipated policies on federal spending have already influenced financial markets. The 10-year Treasury yield, a key indicator for mortgage rates, has risen to 4.475%. As a result, mortgage rates are expected to follow this upward trend. Currently, the 30-year fixed mortgage rate averages around 7%, but it could increase further.

Logan Mohtashami, Lead Analyst at HousingWire, projects short-term rate increases. “Rates are going up!” he states, suggesting that a rise to 8% could happen if the 10-year Treasury yield hits 5%. For Vermont homebuyers, this scenario could mean significantly higher borrowing costs, potentially straining affordability in an already challenging market.

Uncertain Impact of Trump’s Housing Agenda on Vermont

The details of Trump’s housing agenda remain mostly unclear. Previously, he linked immigration to increased housing demand, arguing that it drives competition and raises home prices. However, there is limited evidence to support a direct impact on states like Vermont, where housing dynamics differ from those in high-immigration areas. Any effect on Vermont from changes to immigration policy would likely be indirect and minimal.

Trump has also indicated support for renewing the 2017 tax cuts, which could increase disposable income for some households. However, the effects on Vermont’s housing affordability remain uncertain. While tax changes may slightly influence household budgets, other factors—such as interest rates and local housing supply—play a more significant role in determining affordability in Vermont.

Trump has also shown interest in removing Fannie Mae and Freddie Mac from federal conservatorship. This complex policy shift could take years to implement and faces substantial regulatory hurdles. Should privatization proceed, it may reshape the national mortgage landscape, but specific impacts on Vermont’s access to credit and mortgage costs remain speculative. Opponents argue that privatization could limit credit options and raise fees, making homeownership more difficult, but these concerns are hypothetical at this stage, with no immediate evidence of a direct effect on Vermont.

Deregulation and Vermont’s Housing Sector

A Trump administration is expected to roll back regulations, which could affect housing agencies such as the Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB). With Republican control of Congress, Trump’s agenda may include reducing regulatory requirements that currently affect Vermont lenders and real estate professionals, potentially lowering costs and simplifying processes.

However, Vermont’s housing market may also see some challenges. Trump has backed tariffs on foreign goods, which could raise prices for construction materials like lumber. For Vermont builders, this would mean higher costs, which may, in turn, increase home prices and slow new housing development.

Key Takeaways for Vermont Buyers and Homeowners

If mortgage rates climb to 8%, Vermont’s already strained housing affordability could worsen. Buyers might need to adjust their budgets or reconsider purchasing in the near term. Meanwhile, developers may face increased construction costs, potentially impacting home availability and prices.

About The Author

Meet Tony Walton, owner and principal broker at New England Landmark Realty, your expert guide to Vermont's real estate scene. Discover personalized market reports, connect with our superior team of local Agents and Brokers, and access valuable resources for buyers and sellers. Delve into Tony's bio and kickstart your real estate journey today with New England Landmark Realty. Find his team at VTMove.com or call 802-253-4711 for personalized service and expert guidance