WASHINGTON (TNND) — Mortgage rates hit a 10-month low this week and more inventory is piling up on the housing market, yet many buyers are still priced out of homeownership in broad swaths of the country that is likely to leave the housing market stuck in neutral.

The housing market’s slump is nearly through its third consecutive year with minimal hope on the horizon for major improvements as list prices have been mostly stable and mortgage rates between 6 to 7% add hundreds of dollars to monthly payments compared to pandemic-era levels.

Breaking out of the market freeze has been a struggle for buyers, sellers and builders that are all facing their own issues.

Buyers are facing an affordability crisis that is keeping homeownership out of reach for many, while sellers are losing market power as listings sit on the market for longer and builders are being hit with higher costs for supplies and rates that make it harder for projects to turn a profit and turn away potential buyers.

The average rate on a 30-year mortgage hit the lowest level since last summer this week at 6.56%. Mortgage rates have only moved modestly downward this year, but a continuation of that trend may help push more people into the market. Last fall saw a big boost in sales after rates dropped beneath 6.5% as buyers rushed off the sidelines to take advantage.

“Purchase demand continues to rise on the back of lower rates and solid economic growth. Though many potential homebuyers still face affordability challenges, consistently lower rates may provide them with the impetus to enter the market,” Freddie Mac chief economist Sam Khater said in a release.

The median existing home price has increased for 25 consecutive months and reached $422,400 in July, according to the National Association of Realtors. Prices for new homes are also out of reach for some buyers at $403,800 as of last month, the National Association of Home Builders said.

The supply of homes available on the market has reached the highest levels since the COVID-era market explosion flooded the zone with buyers that had to get into bidding wars in order to secure a home. Inventory of existing homes currently sits at the highest level since May of 2020 with a 4.6-month supply, according to the NAR.

Homeowners who were able to lock into ultra-low mortgage rates through purchases or refinancing during the pandemic are also starting to let go of their properties in some areas to cash in on equity or changing life events like getting a new job.

With less competition on the market, sellers have been forced to cut asking prices in some areas or make other concessions to make a deal as people who can afford to buy can be more selective. The typical home sold in July was on the market for 28 days, an increase from 24 days from the same time last year, according to NAR.

“Homebuyers are in the best position in more than five years to find the right home and negotiate for a better price,” NAR chief economist Lawrence Yun said in a release.

That trend could reverse if prospective buyers waiting on the sidelines jump back into the market if rates continue to fall. More people looking to buy a home would increase competition, especially in markets that aren’t flush with listings, and could send prices upward again.

Redfin said pending purchases increased for the second consecutive months in August as buyers that have been waiting for rates to fall are taking advantage of the moment. Housing analysts have also said that many buyers may be waiting for an expected rate cut from the Federal Reserve in September to jump into the market.

“Buyers are circling,” said Ali Mafi, a Redfin agent in San Francisco. “House hunters are feeling more confident about buying a home now that mortgage rates have started to decline. Some are making offers now, though others are sitting tight, betting that rates will fall further. I’m telling buyers to act now because it’s still a buyer’s market and most sellers are willing to negotiate. If rates do plummet, the market will get competitive.”

But the pool of buyers that can afford to jump into the market with prices and rates at the current levels may be limited.

Economic uncertainty has also led some people to push off making big financial purchases like homes and cars amid questions about what impact tariffs will have on the economy and the labor market. The latest jobs report showed the labor market stalling out with limited job growth. While layoffs and unemployment remain historically low, consumers are less likely to make major purchases during times of uncertainty.