New home sales climbed in September, rising 4.1% from August and 6.3% year-over-year. Alliant Credit Union head of lending Dan Bauer joins Wealth! to break down the state of the housing market and some of his top tips for first-time homebuyers.

"Housing demand is starting to increase, and we are starting to see a little bit of a lower interest rate environment as a result of recent Fed [Federal Reserve] rate cuts," Bauer tells Yahoo Finance. He notes that lower rates can lead to lower monthly mortgage payments, giving homeowners more buying power to explore options like more expensive homes in more desirable locations.

As the Fed interest rate cuts become increasingly priced into mortgage rates, Bauer points to jobless claims and housing supply data as catalysts for mortgage rates to further decline. Follow along Yahoo Finance's breaking coverage of this week's mortgage rates.

For those looking to buy a home, he encourages having a plan in mind and getting pre-qualified to understand what you're able to afford. He also suggests adjustable-rate mortgages, as they provide "an alternative in high interest rate markets with a lower initial interest rate and possibly the ability to refinance if rates drop in the future."

Most importantly, he recommends evaluating how buying a home will fit into your long-term financial goals: "Creating a customized plan for you and your family is absolutely critical. Working with professionals like financial advisors, like a professional mortgage lender, and real estate experts in your market, are always fantastic advice for any first-time homebuyer."

Watch the video above to hear some of the biggest trends among homebuyers.

To watch more expert insights and analysis on the latest market action, check out more Wealth here.

This post was written by Melanie Riehl