BUYERS: Get an Inside Look at the Latest Real Estate Trends

Decoding The Fall-Winter Housing Market: What Buyers Need to Know
Everest experts break down the hottest trends for the colder seasons of 2024.

As we head into the final quarter of 2024, real estate experts are sharing their forecasts for the upcoming season. Just because the weather is bound to be chilly, doesn’t mean you won’t find some toasty mortgage rates!

In fact, after several years of overwhelming interest rates, there’s cautious optimism on the horizon. Mortgage rates have dropped, which could yield better deals for buyers in the tail end of 2024. Of course, there’s more to buying a house than just your interest rate; you’ll still need to decode the data coming at you from all directions in order to make an educated decision.

That’s where Everest experts come in.

This month, our featured expert, Kim Donnelly, will be breaking down the key market trends for the fourth quarter – complete with tips to help you make sense of all that info. 

Let’s get started!

What’s happening in Q4 2024?

Over the past two years, we’ve experienced the highest mortgage rates seen in the last two decades. More recently, falling mortgage rates have gradually improved the housing market for buyers. As of September of this year, the average 30-year mortgage rate is down near 6% and experts expect the rate to continue a slight decline into 2025. While this does mean increased affordability and more purchasing power for buyers, we shouldn’t overlook the trend that tends to rise alongside mortgage rates: demand. 

Inventory shortages continue

On average, U.S. home values are up 2.9% this year, with the average home priced at around $361,282. Experts at Fannie Mae and the National Association of Realtors predict that prices will continue to rise up to 6.1% compared to the previous year. This increase is largely due to inventory shortages. 

“It’s crucial for buyers to go into the purchasing process financially prepared – and well informed on the pros and cons. With the current housing inventory shortages, they’ll need to act quickly when they find the home they want.” Kim says. 

According to Zillow, the U.S. is currently 4.5M homes short of a healthy housing supply. This shortage has been exacerbated by the fact that many homeowners are reluctant to sell, opting to hold on to their homes due to higher interest rates. As a result, competition remains fierce, particularly in desirable urban and suburban areas. 

While buyers should generally be prepared to make multiple offers before securing a home, the right loan expert can help you make your offer with confidence by helping you calculate what you can afford ahead of time.

“Your number one tool – your winning ticket – is having an experienced mortgage advisor by your side to lead you to the finish line,” Kim elaborates. “Without that, all your other resources won’t be nearly as helpful.” 

Is a market crash imminent?

Despite rising home prices, experts do not foresee a housing market crash in 2025. The primary reason for this is the persistent shortage of available homes. This trend is expected to help keep prices stable or rising. While a severe economic recession could potentially shift this pattern, the dramatic lack of inventory makes a crash unlikely overall. 

This is where your financial network can be a crucial tool in your home buying journey. An experienced mortgage broker can help you make sense of current events. They have access to a world of data not easily accessible to the average person. This is how we were able to determine potential outcomes for the last quarter.

“When interest rates fell in August, we knew that the lenders had already priced the .5 rate cut into the interest rate. So, we knew that mortgage rates were not likely to drop,” Kim explains. “In fact, it was more likely that the rates would rise slightly – which they did. This kind of situation is exactly why you should listen to your mortgage advisor!

Another important aspect of your relationship with your mortgage specialist is their ability to explain key terms in the industry. This can help prevent you from getting overwhelmed by technical jargon during the home buying process. 

Thankfully, you have Everest on your side. We’ve put together a list of the most crucial financial terms – so you can feel confident from application to closing. 

9 BIG Homebuying Terms

1. Mortgage Rate

A mortgage rate is the interest rate charged by a lender on a home loan.  Typically, the greater the risk your loan is, the higher the interest rate will be. A no-doc loan (which we’ll discuss a bit later) is one of the greatest risks and therefore will carry one of the highest rates. A conventional loan with 25% down and an 800 credit score with a low DTI will have a much lower risk and so will most likely have one of the lowest rates available. 

Even small changes in mortgage rates can significantly impact your monthly payments. Lower rates, like the ones that are trending right now, can increase your “purchasing power” (aka. The amount of money you have to spend, with fewer fees).

We often discuss the cost of waiting with our clients. Many experts try to put a percentage or dollar amount on required savings to refinance. It is more of a quality of life question for you. We see a lot of cash-out refinance for debt consolidation, this has the potential to save you loads of money monthly; or you may simply refinance to reduce your monthly mortgage payment and keep more money in your pocket. Each person and scenario is unique and so the answer is unique as well.

Kim says, “When you deal with a professional, ethical mortgage broker, one of their highest priorities should be lender relationships. For example, Everest has an entire network of lenders that love working with us. This allows us to offer you a plethora of options to help you achieve your goals and save you money.”

2. Closing Costs

When you ‘close on’ (or complete) a home buying process, you’ll be dealing with some other fees and expenses to cover other important services. These can include things like legal fees, title fees, and escrows. Closing costs typically range from 2% to 5% of a home’s price. However, most conventional and government loans also allow a gift from a family member to cover all or a portion of your closing costs – and even your down payment.

“Your mortgage should not make it harder for you to reach your goals,” says Kim. “An experienced loan officer should be able to help you customize your loan agreement – as well as prepare any documentation needed to show that gifts are coming from an acceptable source.”

3. Down Payment

A down payment is basically an upfront deposit of cash the buyer makes when purchasing a home. These can range anywhere from 3% to 20% of the home’s total price, depending on the terms of your mortgage. In most cases, a larger down payment can help you pay less over the course of the loan, since interest rates are calculated based on the total amount due. 

Kim has some big thoughts on this one: 

“I can’t stress this enough: listen to your realtor before you make an offer. Countless clients have lost out on a home they loved by as little as $5K because they went against their agent’s advice to ‘win the deal’. But your realtor knows your market; they’re going to have the best insight on what you should offer.”

4. Appraisal

An appraisal is a professional evaluation of a property’s market value. Lenders require this step in order to ensure that the home is worth the loan amount. This is an upfront fee you will pay at the beginning of your loan process.

“An appraisal is there to help protect both you and your lender before you make a purchase,” says Kim. “Your loan will be based on the appraised value. You may be able to negotiate the sales price with the seller, but they are not required to reduce the price. You may have to pay a little extra to make up the difference between the value and the contract price. In this case, your loan officer may be able to help you restructure your loan to lessen the out of pocket fee.”

5. Federal Funds Rate

This crucial term refers to the standard rate that banks charge each other for short-term loans. It is a key driver in the economy. Though, it has more of an indirect effect on mortgage rates. 

“This term confuses a lot of people,” Kim explains. “People hear that the rate is going up or down and they think it will affect the interest rate on their mortgage. When, really, it’s just one of the contributing factors. Other factors that affect the mortgage rate including the Federal Funds Rate, inflation and a whole host of economical data that is released monthly. In fact, the world economy can also play a part in the U.S. mortgage rates.”

6. Median Price

A median price is the midpoint of all prices of all homes sold in the country. This number helps to track trends and gauge strength in the market. 

If you search for median prices, you’re likely to get different answers. This is because there are also local median prices for different areas of the market. This is the number that is going to be the most relevant to you. 

“It’s important to maintain a local perspective,” Kim says. “You won’t always get the opportunity to make a counter offer on the home you want. So, even if you find out that the national numbers are doing one thing, the local numbers are more important. Your agent can offer you insight on those to help you formulate your offer.”

7. Non-QM

A non-qualified mortgage (or non-QM) is not a standard mortgage, but it is still widely used. In general, this just means that it does not fit into the guidelines for conventional loans (as specified by Fannie Mae or Freddie Mac). Instead, it allows for more flexible terms with supporting documents, and other guidelines.

“A non-QM loan is an out-of-the-box loan,” Kim explains. “It’s widely used for people who have non-standard forms of supporting documents, unconventional income streams, or other unusual financial circumstances. This allows people like this to get a loan, despite common restrictions. Though, it does usually come with a higher interest rate.”

8. DTI

Your debt-to-income ratio (DTI) is just what it sounds like. It’s the ratio between the amount of debt you currently have (mortgages, loans, credit cards, etc) and your total gross income. In the case of your mortgage, your lender will use your DTI with other factors to calculate your eligibility for a loan. 

“Paying off your debt or paying points to reduce your rate are two of the most common ways you can lower your DTI,” Kim explains. “An experienced loan officer can review your whole file to recommend the best course of action for you or possibly switch the loan type to better suit your needs and qualifications.”

9. LTV

Loan to value (LTV) is a percentage calculated by comparing the total of your loan to the value of your property. A lower LTV will often give you a better Interest rate.

“Factors that determine your interest rate include your DTI ratio, your credit score, and your LTV percentage,” Kim says. “Your Loan Officer can work with you to maximize your current situation and present your best financial front to your lender – helping to insure an optimized rate.”

Get ready to close!

So, you’ve looked at current events, broken down the latest trends, and become familiar with key terms. What else should you keep in mind going forward? Kim has an insightful answer:

“As important as all these facts and terms are, it’s not only about the rates. The right mortgage, structured the right way, can save you thousands. The right mortgage specialist can help you set that up: the loan that fits your needs – and the expertise to get you to the home of your dreams.”

Honestly, we couldn’t have said it better ourselves. 

Everest says: Get a seamless closing 

with the right experts by your side. 

Everest Equity

Licensed for 

Residential Mortgage Origination in

NY, NJ, CT, PA, NC, FL, and TX

No matter where the market takes you, trust our diverse team of

professionals to close on your mortgage with the best terms possible.