Developers cite mortgage rates, materials, permitting and labor as primary drivers of rising housing costs

Developers and homebuilders told the Economic Development, Housing & General Affairs committee that multiple, compounding factors are driving up the cost of new housing in Vermont, making homeownership out of reach for many residents.

In testimony to committee members, Jim Bradley, a project manager and developer with Hayward Design Build in South Huron, said higher mortgage rates and rising material and labor costs are squeezing buyers and builders alike. "When mortgage rates move from around 3% to 6½–7%," Bradley said, "every $1,000 that the price of a home goes up, you're pricing about 950 people out of the market." He added that grant subsidies alone can push market prices higher for subsequent buyers and said targeted mortgage-rate buy-downs can be more effective than lump-sum subsidies for expanding ownership.

Bradley also cited recent swings and longer-term changes in lumber markets, including mill curtailments in Canada and existing tariffs, as drivers of higher building costs. "Two-by-tens has gone up year over year 63.2%," he said, and noted that tariffs and reduced Canadian production could further raise prices in…