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Q: The fed recently announced it won’t be as aggressive raising interest rates next year. What are your thoughts on this development and how it relates to the Bay Area real estate market?

A: That is good news for our Bay Area real estate market. Raising mortgage interest rates erode home buyers purchasing power and decrease buyer demand.

At the Fed’s policy meeting this week they were debating on how to signal less certainty over the path of interest

rates without implying they are done raising them. Since the central bank began raising rates three years ago, it has indicated the potential for further gradual increases.

This week they talked about modifying their policy statement from “further gradual increases” in rates to “data

dependent” to reflect that their policy path looks less certain than it did three months ago. However, on Wednesday during their policy meeting they did elect to raise interest rates.

They have been raising rates to try and keep inflation rate at its 2 percent annual target while maximizing employment.

But it is a fine line for the Fed’s. Higher rates can slow economic growth. If they miscalculate and raise rates too high or too fast, history suggests they risk triggering a recession.

Jeff LaMont, Coldwell Banker, 650-740-8808, jlamont@cbnorcal.com.

A: Market sentiment will probably go back and forth as to the “appropriate” pace for Fed action is debated and therefore fixed mortgage rates will probably swing with that sentiment.

Predicting mortgage rates is difficult, let alone how that will impact the Bay Area real estate market. Despite public sentiment, the good news for home buyers and sellers is that there has been a sudden reversal rate directions and today’s rates are slightly more attractive than in last several months. Those sensitive to monthly mortgage payments should be motivated by the recent retraction in interest rates.

Ultimately, the first quarter real estate market will likely see an uptick in movement as educated buyers take advantage of rates before they may move north again. As we settle into the year, however, we will likely continue to see a normalization of real estate prices similar to what we’ve seen this fall.

Ashley Henderson, Compass, 415-841-2118, ashley@hendersonsfre.com.

A: Keeping rates low has always had a positive effect on the housing market. For every full percentage point rate decrease, a buyer’s loan amount could be increased by as much as nine to 11 percent.

In other words, with a one percent decrease in rates on a $1 million mortgage loan, you could qualify for an additional $90,000 to $110,000 loan amount for the same monthly payment.

The opposite is true when rates increase. A buyer’s purchasing power can be affected by as little as a one-quarter percent increase, denying many potential buyers the opportunity to obtain the American Dream of homeownership.

With recent unsteady national and global market concerns, the American people deserve to have members of the Federal Reserve Board carefully consider all economic factors before making any major, or even minor, changes regarding interest rates. The effects can be devastating, not only on the housing market, but on the very financial stability of our country. With exceptionally high prices in the Bay Area, every little bit helps buyers by increasing their home purchasing power with lower rates.

Jill Gumina, Alain Pinel Realtors, 415-265-1717, jkgumina@gmail.com.

It was supposed to be a fairly smooth sign-off on an ambitious plan to stanch the Bay Area’s housing crisis.

Instead, Wednesday’s meeting of the Metropolitan Transportation Commission became a taut showdown. While a panel of mayors, transit officials and business leaders vigorously defended their proposal to build 35,000 homes a year, residents and leaders of smaller cities who had been balking solidified into stiff opposition, saying they’d been left out of the discussions.

After a four-hour debate, the commission voted 14-3 to authorize MTC Chairman Jake Mackenzie to sign the plan — which is advisory only, but meant to serve as a blueprint for state and local lawmakers. Commissioners call it a compact, a compromise among various groups that don’t always trust each other: developers, tech executives, politicians, tenant advocates.

Even so, MTC Executive Director Steve Heminger acknowledged that not everyone is happy about the arrangement. Tension stewed from the outset of the meeting.

“This conversation has taken some, maybe all of you out of your comfort zone — it’s certainly taken me out of mine,” Heminger said. “But I think we also have to acknowledge that our collective comfort zone is what has produced the housing crisis that we have.”

The MTC and the Association of Bay Area Governments convened the panel — called the Committee to House the Bay Area and referred to as CASA — to tackle a glaring imbalance: Since the recession ended in 2010, the Bay Area has created 722,000 jobs but built only 106,000 housing units. As a result, people are forced to live in wildfire zones or endure grinding commutes.

The answer, according to members of CASA, is an intricate mix of production and protection. Their 10-point compact calls for a regional rent cap, new property taxes, laws against arbitrary evictions and loose zoning near transit centers. The goal: build 35,000 homes each year, including 14,000 that are affordable to low-income families and 7,000 that are affordable to moderate-income families.

At the same time, panel members seek to preserve 30,000 units of existing affordable housing and 300,000 low-income households that are on the verge of being displaced.

CASA members also want to create an agency with taxing authority to shepherd the policies.

It’s not perfect, supporters say. But as more people despair of living anywhere near where they work, it’s incumbent upon politicians to respond, they say.

“We’ve got to drive home the message to everyone in the region that the affordable housing crisis is hurting you,” said Oakland Mayor Libby Schaaf, who sat on the panel’s steering committee, “whether it’s because your grandchildren can’t live near you … or your children’s teacher will have to leave in the middle of the year” to find cheaper rent.

Critics had voiced concerns during previous discussions of the plan as it was being developed, but the anger that boiled over Wednesday exceeded anything that came before. One by one, 2 dozen foes blasted the CASA plan, many calling it an overreach and a cynical attempt to force suburbs to go dense.

“I’m here to represent the missing middle — the local electeds who have been left out of this effort,” said Los Altos City Councilwoman Anita Enander. She urged the commission to delay its vote, or reject the 10-point compact altogether.

“We deserve time to evaluate these recommendations and have our expertise considered before this goes forward,” she said.

Eva Chao, a San Francisco businesswoman, called the plan a socialist “coup” by politicians who want to make all neighborhoods look the same.

Others accused the panel of promoting housing construction to benefit large real estate and tech companies — noting that CASA’s steering committee includes representatives of Facebook, Google, and the Hunters Point Shipyard developer FivePoint.

Susan Kirsch, founder of the moderate-growth group Livable California, stressed that point in a letter to the commission.

“We acknowledge that MTC, the Bay Area Council, big businesses like Google and Facebook, and the building and real estate interests would like to see a unanimous vote of approval,” she wrote. “Imagine the fanfare of delivering this coup to legislators, swayed by big corporate donors who insist on high rates of return on their real estate investments. That would explain why 60 percent of the CASA Compact is dedicated to new housing production.”

Not everyone was a detractor. About 20 mostly younger people spoke in favor of the compact, describing the painful ramifications of scarce affordable housing. Victoria Fierce, a member of the pro-density group East Bay for Everyone, said she had to sleep on couches when she moved to Oakland from Akron, Ohio, because rents were beyond her reach.

Developer Michael Covarrubias called the CASA compact the most difficult project of his career. “Labor, nonprofits, for-profits, equity folks — (they) were all defending their turf,” he said, marveling out how the disparate groups had managed to compromise.

He recounted how the committee began with 54 policy ideas and whittled them down to 10, in the hope of creating a package of bills that Sacramento legislators could pick up. CASA’s recommendations are not enforceable laws — but they are intended to serve as guidelines for state lawmakers, city council members and incoming Gov. Gavin Newsom.

Heminger conceded that CASA could have done more community outreach over the year and a half that it worked to create the housing plan.

“Obviously we did not have all 101 (Bay Area) cities involved,” he said. “We’re trying to remedy that as we speak.”

Even so, he urged the commissioners to approve the plan so it could be shipped to lawmakers’ desks in Sacramento. “We’re staring a new legislative session in the face,” he said.

Rachel Swan is a San Francisco Chronicle staff writer. Email: rswan@sfchronicle.com