Vermont policy makers have spent years trying to tackle the state’s housing crisis from multiple angles. But one idea has come to dominate the conversation: Build more homes. Adding supply, the thinking goes, should help bring prices down.
But a new study of Burlington home sales by researchers at the University of Vermont suggests that approach may not work. In today’s market, it doesn’t take many investors to push prices higher — especially when they’re armed with cash.
The study, by UVM economist and assistant professor Joe Ament and doctoral student Chris McElroy, analyzed more than 4,000 sales of single- and two-family homes in Burlington between 2003 and 2023, drawing on publicly available records to examine what’s driving rising home prices. McElroy and research assistant Will Jones combed through thousands of closing documents by hand.
During the study period, the average home price in Burlington climbed from about $188,000 in 2003 to nearly $500,000 in 2023, with the sharpest increases in recent years. Investor activity and other demand-side pressures drove the increase more than the lack of housing supply, the researchers found.
The study, titled “It’s Not About Supply,” identified 144 investor purchases of homes, rising from just three in 2003 to about a dozen (or 12 percent of total sales) in 2023. The researchers tracked purchases made by LLCs and corporations, common proxies for investors that likely undercount the total, since some investors buy property under their own names, Ament said.
In the study’s models, each additional investor in the market was associated with a roughly $10,480 increase in overall home prices — rising to more than $13,000 when larger down payments were factored in.
Investors’ access to cash is a key part of what drives up prices. About a third of investor purchases in the study were all-cash, and many others involved large down payments, often covering 40 to 50 percent of a home’s price. That, in turn, is pushing up down payments across the market as other buyers compete. Among non-investors, down payments have more than doubled over the past two decades, and a majority of buyers now put down more than 20 percent — a pattern that was once far more common among investors.
All-cash purchases in Burlington have also surged, accounting for nearly a quarter of sales in recent years.
Ament’s curiosity about down payments sparked the study. Back in 2020, after his family was outbid on a single-family home in Burlington, he began looking more closely at recent home sales in the city. Using public records such as mortgage filings, he pulled a handful of transactions and estimated down payments by comparing sale prices with mortgage figures. Many involved large amounts of cash.
When Ament and his team assembled a full dataset, the trend held. Investor activity and large down payments were closely tied to higher home prices in the study’s models. And as more buyers relied on cash or large up-front payments, interest rates — a traditional tool for cooling housing markets — appeared to have less influence.
There’s just no evidence that building more housing would bring prices down. It’s quite the opposite.
Joe Ament
“There’s just no evidence that building more housing would bring prices down,” Ament said. “It’s quite the opposite.”
According to him, the findings suggest policy needs to address demand, including investor activity, alongside supply. But proposals aimed at curbing investor activity — at both the federal and state level — tend to target large institutional investors, like those who are buying up middle-class homes in Sunbelt states, not the smaller-scale buyers influencing Burlington’s market.
This legislative session, Rep. Emilie Krasnow (D-South Burlington) introduced a bill aimed at slowing the purchasing power of large real estate investors with significant financial backing. The proposal targeted institutional investors who own at least 10 properties and are backed by $300 million or more in assets.
Modeled on legislation in New York State, the bill would have required certain investors to wait 90 days from the time a house hits the market before purchasing single- and two-family homes, giving local buyers more time to compete.
The bill did not advance. Krasnow said it was designed to get ahead of trends seen elsewhere in the country.
“I don’t think people should be competing with the largest corporations that can swoop up neighborhoods [with] all-cash offers and not give an opportunity to people in my generation,” the millennial lawmaker said.
In Burlington, Ament’s study suggests that investor activity, even at a much smaller scale, is already shaping prices. By his estimates, removing a single investor from the market would have roughly the same effect as adding eight homes.
Given this, why all the focus on building?
The assumption that more supply would lower prices comes from a basic economic model that treats goods as interchangeable commodities, Ament said. Housing, he said, doesn’t behave that way. It is both a necessity and an investment, shaped by limited land, population dynamics and other forces — what his paper, currently available online through the Social Science Research Network, describes as “a reluctant fit in a market model.”
“The supposedly simple supply-and-demand model is not simple,” he said. “There are assumptions built in that don’t hold for housing. And there are power dynamics that need to be accounted for.”
That doesn’t mean building more housing has no impact on prices. But impact depends on how much and what kind of housing gets built, Ament said. In a high-demand market, smaller increases in supply may be quickly absorbed. And adding higher-end homes may do little to improve affordability compared to building more moderately priced units. At the same time, he noted, investors may play a key role in financing and developing rental housing, especially larger apartment projects, which his study did not examine.
For Ament, building housing in Burlington boils down to this: “If we’re going to make more, we need to be asking: What kind? And who will own it?”
The original print version of this article was headlined “The Building Dilemma: A UVM study says constructing more homes in Burlington won’t bring down costs — as investors and buyers with cash compete for what’s built”
This article appears in Nest • Spring 2026.
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