Mortgage rates are likely to remain high despite the Federal Reserve’s pause on interest rate hikes.

While that may be good sign for fixed-income funds in California, the pause is a blow to affordable housing in the state, said Fiona Ma, California state treasurer, during the CNBC Financial Advisor Summit. 

The Fed announced Wednesday it would hold interest rates steady in June, after the committee had hiked borrowing rates 10 times since March 2022. Policymakers said they anticipate two quarter-point interest rate increases are forecasted for later this year.

In California, a state where the cost of living is high, affordable housing and savings programs continue to be priorities for Ma.

“Trying to make sure my agencies are being proactive has been key,” Ma said. 

Rising interest rates have affected the real estate market, making it harder for people to afford buying a home. To make it easier, Ma launched a new program called Dream for All on March 27, where the state of California provided down payment assistance to qualifying first-time homebuyers. The program closed after two weeks due to overwhelming demand.

“Demand is still strong for home ownership but, yes, as soon as we can lower the rates back, I think the real estate market will continue to flourish again,” Ma said.