By Tony Walton | April 26, 2025

Let’s get something straight — if you live in, invest in, or dream of Vermont, what’s happening with mortgage rates right now is more than just background noise. It's the drumbeat of our real estate market's future.

After months of chaos, mortgage rates have started to calm down. Across the U.S., and right here in Vermont, this means buyers and sellers are finally catching their breath — but the real question is: how long can this last?

Vermont's Local Angle: What the Numbers Mean for the Green Mountain State

Since President Trump’s so-called "Liberation Day" on April 2, mortgage rates and the bond market have been on a wild ride. For Vermonters, it felt like we were trying to buy or sell homes while standing on a ship in a hurricane. Rates surged, inventory wobbled, and nerves frayed.

But here's the update: rates have now pulled back slightly. The 10-year Treasury yield — a critical driver of mortgage pricing — slipped from 4.43% to 4.24% last week. As a result, Vermont mortgage rates edged a bit lower, but still hover stubbornly between 6.0% and 7.0% depending on borrower profiles and property types. If you’re shopping in Stowe, Burlington, or Montpelier, it feels like a small but real break.

Still, don’t get comfortable. We are one trade war headline away from this calm snapping like a twig under a first-season hiker's boot in the Green Mountains.

Mortgage Spreads: The Hidden Battle

Even as bond yields improve, spreads — the extra cost lenders tack onto rates — remain elevated. Without this spread, Vermonters could easily be seeing rates 0.6% to 0.8% lower than today. That's the difference between a buyer affording a four-bedroom in Waterbury instead of settling for a two-bedroom condo in Barre.

The spread problem started nationally after the Silicon Valley Bank collapse in 2023 and has stubbornly stuck around. In Vermont's tighter housing markets, especially popular resort towns, these higher costs hit hard.

Purchase Applications and Pending Sales: Vermont Still Hanging Tough

In Vermont, purchase activity hasn't collapsed — not even close. Nationwide, 2025 purchase applications are showing 7 positive weeks versus 5 negative, and Vermont mirrors this resilience. Local lenders are reporting that buyers are adapting to higher rates, motivated by limited inventory and the life-cycle reasons that don't wait for lower borrowing costs.

Pending sales in Vermont towns like Middlebury, Brattleboro, and Woodstock remain positive year-over-year, but momentum has cooled — thanks more to high rates than to anything else.

Inventory: Finally Some Breathing Room

Here's the best news: Inventory is rising. Nationally, active listings are up to 731,989, compared to just 556,291 last year. In Vermont, the story is similar, with Chittenden and Washington counties seeing new listings increase by 8% compared to 2024. It's still not "normal" — remember, in 2015 there were over a million active listings nationwide — but it’s progress.

More Vermont inventory means fewer bidding wars in places like Shelburne and Waitsfield, and a little more negotiating power for buyers.

Prices: Small Gains, But Price Cuts Are Climbing

Vermont home prices are still ticking up — but slowly. My 2025 call for Vermont echoes the national trend: expect about a 1.5% to 2% price gain this year. However, price cuts are rising. In 2025 so far, 35.6% of listings nationally have cut prices — up from 29% in 2023. Vermont sellers are feeling the pressure, especially on properties priced too aggressively in second-home markets like Killington or Stratton.

The message? If you're selling, price right or get ready to adjust.

What's Next for Vermont?

This week will be volatile. Jobs reports, inflation data, and whatever bombshells come out of Washington or Beijing will shake mortgage rates again. If the job market weakens — as some economists expect this summer — bond yields could fall, pulling mortgage rates lower with them.

In Vermont, that could unleash another mini-frenzy of buyers trying to lock in more favorable rates before the next storm.

Bottom Line:

  • Buyers: Be ready to move fast if rates dip under 6.5%. It's your best shot at locking in savings.
  • Sellers: Recognize the market is shifting. Price strategically, or prepare to negotiate hard.
  • Investors: More inventory and softer prices mean it's time to sharpen your pencils. Vermont rental demand remains strong — especially near resorts and universities.

Tony Walton and the NELandmark.com Team
Nobody knows Vermont real estate like we do — from the mountain trails of Stowe to the maple farms of Addison County. We live here, we work here, and we’re committed to helping you find your place in Vermont’s future. Check out our Ultimate Buyers Guide!
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