According to a report released last week, average home prices in the U.S. hit a record high for the second month in a row. Sales continued to decline, while potential buyers are still waiting for lower mortgage rates.

Existing-home sales fell 5.4% in June, with the median home sales reaching the highest level since prices began being tracked by the National Association of Realtors in 1999. The median price rose the most in the Northeast region, at 9.7%. Existing-home sales fell 8% in the Midwest in June, the largest decline among the regions, according to the report released Tuesday.

New home sales, released Wednesday by the U.S. Census Bureau, fell 0.6% in June and are 7.4% lower than new home sales a year ago. The median sales price of a new home was $417,300, lower than the median sales price of existing homes of $426,900. Housing experts said this price accuracy is unusual, as new homes have typically sold for much more over the past 10 years and may reflect a shift in demand for smaller, more affordable homes.

Despite that change, these two measures have shown that home prices are still unaffordable for many, and sales have been slow in response. What’s driving these prices, and when will they abate? Housing economists say there are many factors at play, including Fed policy and an aging population.

Why are home sales low and home prices high?

High demand for homes and lower inventory levels have contributed to higher home prices in recent years. These expensive home prices and high mortgage rates have led to this shift in the housing market.

Matthew Walsh, an economist at Moody’s Analytics, said low housing affordability and “persistently high” mortgage rates are contributing to the slowing housing activity. Unless housing becomes more affordable soon, he expects existing home sales to continue to decline. The 30-year fixed mortgage rate was 6.78% as of July 25, according to Freddie Mac.

“Buyers are responding very well to mortgage rates and given the information that is so readily available and the expectation that mortgage rates are going to come down, I think that is keeping people on the sidelines,” said Selma Hepp, chief economist at CoreLogic.

But she said homebuyers face a double-edged sword. If mortgage rates fall, there will be a lot of pent-up demand that will also put pressure on home prices. An increase in cash buyers could also push prices up, Hepp said. All cash buyers accounted for 28% of home transactions in June.

“A lot of these cash buyers are actually baby boomers who may have cashed out of their current home. We know that equity in homes is at an all-time high and if you’re moving from an area with a very expensive home to an area with a lower price, you obviously have a lot of money,” she added.

The housing supply is changing, but is that enough?

One bright spot for homebuyers is that the overall housing inventory has increased. Inventory is up 3.1% from May and 23.4% from a year ago, according to the June Existing Home Sales Report. Walsh said some households may decide they can’t wait to make a change in their lives and move out of their homes for bigger or smaller options.

“There are many households that can no longer postpone their plans to sell, whether it’s because their household is growing because they’re having children or because it’s shrinking and they have to sell their larger home in the Northeast and move to a smaller home to retire in the South,” Walsh said. “They can no longer afford to live in the homes they’re living in and sacrifice their low mortgage rates for a higher rate.”

Still, Hepp said inventory is much lower than it was before the pandemic and that in places where demand has increased (for example, Boston, New York and Chicago), the supply of homes has not increased proportionally.

Some homebuyers may be looking to the Fed’s plans to cut interest rates, which affect mortgage rates, for some financial relief. A majority of economists say they believe the Fed will cut rates in September and December, according to a recent Reuters poll. Cutting rates could help bring some buyers back into the market and pump up inventory, but the effect likely won’t be strong enough to get home sales back to where they were before the pandemic, Walsh added.

What is the government doing?

The Biden administration this month announced a flurry of proposals to make housing more affordable, some of which would also affect homebuyers, as well as the rezoning of public lands in Nevada to bring at least 15,000 affordable rental and homeownership units to the area. In February, the White House also announced the opening of grant applications for help to homeowners replace dilapidated homes.

Republican presidential candidate Donald Trump said at a July rally in Iowa that he would address housing woes by cutting interest rates, Newsweek reported. While presidents nominate the Fed chair for a four-year term, they have no power over whether the Fed cuts rates.

States have pursued their own policies to improve housing stock and affordability, including Utah and Oregon, which passed legislation to use funds to provide loans to developers who plan to build more affordable housing. A Maryland bill signed by Democratic Gov. Wes Moore in May would encourage homeowners to make plans for vacant properties by letting cities raise taxes on those properties.