The biggest story heading into late 2026 is likely to be affordability rather than a major change in home values.

Mortgage rates have moved sharply higher recently. Freddie Mac's October 1, 2026 survey put the average 30-year fixed mortgage at 7.28%, up from 7.03% the previous week and 6.34% a year earlier.

 

At the same time, the outlook for rates has become considerably less optimistic than some forecasts made earlier this year.

The American Bankers Association's September 2026 Economic Advisory Committee expects mortgage rates to remain above 6.8% over the next year, while also projecting relatively modest home-price growth.

 

That suggests a reasonable working assumption for the Upper Valley is:

Mortgage rates: likely 6.8%–7.5% range

Home prices: modest appreciation rather than a major correction

Inventory: gradually improving, but still constrained

Buyer competition: highly dependent on property and price

Earlier in 2026, Fannie Mae had projected substantially lower mortgage rates — approximately 6.4% for the fourth quarter — but the subsequent rise in Treasury yields and mortgage rates demonstrates why I would be cautious about promising clients that rates are about to fall dramatically.

 

Source Freddie Mac

Higher mortgage rates will continue to put pressure on purchasing power.

For example, the difference between a 6.5% and 7.25% mortgage is significant on a typical Upper Valley purchase. Buyers should therefore focus on monthly affordability, not simply the purchase price.

But waiting for rates to fall isn't necessarily the best strategy.

If rates eventually decline, buyers who purchase now may have the opportunity to refinance. Meanwhile, waiting can mean competing against more buyers if lower rates bring additional demand back into the market.

The Upper Valley also has a structural advantage: housing supply remains limited relative to demand.

New Hampshire Housing's 2026 housing report found that the state's median single-family home price had reached $575,000, while only about 15% of New Hampshire households could afford that median-priced home.

That affordability problem is real — but it doesn't necessarily translate into falling Upper Valley prices.

 

Source: New Hampshire Housing

 

Photo: 106 Cliff Mull Lane, Fairlee, VT OTM $1,800,000

I expect properly priced, well-presented homes to continue attracting buyers, while properties that are overpriced may sit substantially longer.

This is particularly important in a higher-rate environment.

Buyers have less room for error when their monthly payment is already elevated. As a result, they tend to scrutinize:

• Condition and deferred maintenance
• Heating costs
• Taxes
• Garage/storage
• Potential future improvements

The days when almost any reasonably priced Upper Valley home could generate a bidding war are not something sellers should automatically assume will return.

Pricing correctly from the beginning is increasingly important.

 

Photo: 78 Apple Blossom Drive, Lebanon, NH CL $599,000

The next six months should be a market of opportunity — but not a market to approach casually.

I expect:

Prices:
Generally stable to modestly higher, with stronger properties outperforming the broader market.

Mortgage rates:
Likely to remain elevated, with a reasonable expectation that 30-year rates spend much of the next six months around the upper-6% to low-7% range rather than rapidly returning to the 5% range.

Inventory:
Some improvement is likely, giving buyers more choices than during the tightest portions of the pandemic-era market — but desirable Upper Valley properties should remain relatively scarce.

Buyers:
More negotiating power than they had several years ago, particularly on properties that have been sitting, but strong properties at realistic prices can still move quickly.

Sellers:
The strongest position will belong to sellers who understand the current market and price accordingly from day one.

 

Thinking About Your Next Move?

Whether you're considering buying your first Upper Valley home, moving closer to Dartmouth or Dartmouth Health, purchasing a second home in Vermont or New Hampshire, or thinking about selling a property you've owned for years, I'd be happy to provide a confidential, no-obligation assessment of your options.

I specialize in the Upper Valley of New Hampshire and Vermont, including Hanover, Lebanon, Norwich, Hartford, Enfield, Lyme, Canaan, Grantham, South Royalton, Woodstock, and surrounding communities.

Let's talk about your next move.

 

Photo: 1616 Beaver Meadow Road, Norwich, VT CL Off Market $1,097,000