Home prices are high, but home sales are slow—what does this mean for you?

Home prices in San Diego have hit record highs for the second month in a row, even as sales continue to fall. With a median price increase of 9.7%, buyers have more choices than ever, thanks to a surge in inventory. But what’s keeping potential buyers on the sidelines? Mortgage rates and market anticipation play a big role, according to Selma Hepp, chief economist at CoreLogic.

As mortgage rates remain high, some buyers are waiting for potential rate cuts by the Fed, expected in September and December. However, the market faces a double-edged sword: lower mortgage rates could unleash pent-up demand, putting pressure on home prices once again.

Interestingly, all-cash buyers, who made up 28% of June transactions, could also be pushing prices higher. Meanwhile, sellers are adjusting their strategies, with nearly 1 in 4 having to cut their listing prices to attract buyers.

Even though home prices are slightly coming down, the median price in San Diego County remains high at $938,000. We’re seeing a significant increase in days on market, but well-priced and move-in-ready homes, especially in areas with top-ranked schools, are still selling quickly.

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