From banking to technology, all market sectors will be impacted by today’s interest rate decision from the Federal Reserve’s Federal Open Market Committee (FOMC). However, the housing market is especially vulnerable. Indeed, every word that Fed Chair Jerome Powell utters could have a make-or-break impact on home prices.

In October, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) wrote a letter to Powell. These organizations practically begged him to stop raising interest rates.

Will the Fed and Powell heed their call for leniency? As the U.S. housing market hangs in the balance, some real estate experts are hoping for the best but preparing for the worst.

There May Be No Mercy for the Housing Market

It’s not difficult to find startling statistics from real estate industry experts. For instance, the Mortgage Bankers Association indicated that U.S. mortgage application volume declined 6.9% during the seven-day period ending Oct. 18. This marked the lowest demand for housing loans since 1996.

Without a doubt, the steep drop in mortgage applications is directly tied to sky-high interest rates. It’s difficult for the average family to afford a new home when the 30-year mortgage interest rate hovers near 8%.

Additionally, experts with the National Association of Realtors have determined that U.S. housing inventory will need to double from current levels in order for home prices to drop. That seems unlikely to happen, of course.

It’s fair to say that, for many people, new homes are practically unaffordable nowadays. Believe it or not, the median home price in the U.S. is now $407,100, per Benzinga. Moreover, the currently existing housing stock represents “only a 3.3-month supply.”

So, it’s understandable that some prospective homebuyers and investors are worried about an impending real estate market crash. And that’s why all eyes are on Powell for hints that he and the Fed will ease up on interest rate hikes and start to cut rates soon.

What You Can Do Now

As the old saying goes, timing is everything. If you don’t have to buy a house now, you may want to wait until conditions are more favorable in the housing industry.

Investors might also choose to ease up on any holdings directly tied to the American housing market. Meanwhile, keep your eyes and ears open for any signals that Powell and the Federal Reserve will show some mercy.

On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.