It's important to understand that the Fed's decision to pause rate cuts will not directly impact mortgage rates. Mortgage rates are actually driven by a range of factors, including the Fed's rate changes. This week's Fed rate decision does, however, have a big influence on where mortgage rates could head.

The Federal Reserve left interest rates unchanged on January 29, and an interest rate cut is unlikely when the Fed issues its next policy decision on March 19, 2025.

Some economists were saying Wednesday that the cutting cycle is over, while others think Chairman Jerome Powell’s Federal Reserve won’t ease again until 2026.