The housing market might not be getting better for buyers and sellers—but it’s not likely to get much worse anytime soon.

On Wednesday, the U.S. Federal Reserve voted to keep interest rates steady instead of raising them. The Fed’s rate hikes over the past year and a half have been like a battering ram on the housing market as the Fed has sought to cool inflation—and along the way, the pricey real estate market.

The Fed has indicated it might do another rate hike this year, but there are no guarantees. And in the short term, mortgage interest rates aren’t likely to shoot back up.

“Holding rates steady alone is not enough for us to see a big change in mortgage rates and therefore the housing market,” Realtor.com® Chief Economist Danielle Hale said in a statement. “I don’t think we’ll see much relief for mortgage rates following the meeting today, but I also don’t think we’ll see things get too much worse.”

The Federal Reserve has increased its rates 11 times since March of last year. While those are separate from mortgage rates, mortgage rates generally move in the same direction.

Mortgage rates averaged 7.18% for 30-year fixed-rate loans in the week ending Sept. 14, according to the latest Freddie Mac data. That’s more than double what they were just two years ago, when they were below 3%, and they’re currently at their highest level in more than 20 years.

“Higher mortgage rates have radically altered homebuyer purchasing power,” Hale said. “Perhaps more importantly, higher mortgage rates continue to keep existing homeowners sidelined, with as many as one in seven out of the market because they don’t want to borrow at today’s much higher rates.”

The real estate market is in a deep freeze: Buyers can’t afford to buy, and homeowners are less likely to sell because they don’t want to give up their low rate to purchase a new home at a higher one. The phenomenon is worsening the housing shortage, which ironically is leading to even higher prices. Those who can still afford to buy are competing for a very small selection of homes, leading to bidding wars and offers over the asking price.

That’s why the number of home sales in the resale market has dropped from an annual pace of about 6.5 million in early 2022 to about 4 million today.

“Mortgage rates are still so much higher than the rate homeowners have locked in, I don’t think it encourages sellers to list,” says Devyn Bachman, senior vice president of research at John Burns Real Estate and Consulting. “And I don’t think it encourages buyers to [come in] off the sidelines.”

The Fed’s decision to pause its rate hikes doesn’t mean that the situation will improve. Rather, it’s likely to remain as it is today until the Fed increases rates again or signals its hikes are finished.

Buyers won’t be pleased to hear that rates are likely to stay above 7%—but of course, it’s still better than if they blew past 8%.

The Fed has signaled it might do another rate hike in the future to bring annual inflation down to its goal of 2%. In August, inflation was nearly double the Fed’s goal, at 3.7%. Another hike, or even the expectation of one, could cause mortgage rates to go back up.

“We are closer to the end of rate hikes in this cycle, but I think it might be another meeting or two before the Fed is confident enough to declare that,” Hale said.

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