How does the Federal Reserve affect mortgages?

Group 1 - The Federal Reserve's decisions influence mortgage rates, even though it does not set them directly [1] - The Fed's latest meeting resulted in a decision to hold the benchmark interest rate steady, following three consecutive rate cuts [2] - Inflation remains slightly elevated, job growth is sluggish, but the unemployment rate is stable, leading to a wait-and-see approach by the Fed [2][3] Group 2 - The chief economist for Cotality noted that uncertainties in the economy persist, particularly in the job market, despite overall economic stability [3] - The Mortgage Bankers Association (MBA) forecasts mortgage rates to remain between 6% and 6.5% for 30-year conforming loans, supporting a stronger spring housing market compared to last year [4] - The next Federal Reserve meeting is scheduled for March 17-18, where new economic projections will be released [5] Group 3 - The Federal Reserve influences borrowing costs for shorter-term loans through changes in the federal funds rate, which indirectly affects mortgage rates [6] - A cut in the federal funds rate generally encourages lenders to lower interest rates, while an increase typically leads to higher borrowing costs for consumers [6]