Home prices are plummeting at the fastest pace in more than a year, as demand for real estate sinks amid languishing sky-high mortgage rates, according to a recent report by Redfin.

The report found that a whopping 6.4% of sellers have cut prices in the month leading up to May 26, the highest percentage of price slashes since November 2022, when the 30-year fixed mortgage rate shot past 7% for the first time in more than two decades.

These cuts have been deep enough to drag down the average US home price, which had recently hit an all-time high.

Data from Redfin shows that the median home price in the US dropped by $3,000 last week to $416,623 — marking the first decline so far this year. Despite the dip, home prices are still up by about 4% year-over-year.

Experts are now warning that the previously red-hot housing market could cool off in the coming months, with record-high mortgage rates discouraging potential homebuyers.

Speaking on the current state of affairs, Redfin agent Christine Chang said, “The market is slower than usual. People who are buying right now are typically doing so because they’re having a baby or looking for a more family-friendly home.”

This pullback in the market comes as a relief to many, as the severe shortage of inventory had driven home prices to dizzying heights over the past year. Redfin data reveals that pending home sales are down 3% year-over-year, while new listings have seen a significant 7.8% increase.

Industry experts are now predicting that the housing market will become more affordable in the near future, as more inventory becomes available and mortgage rates start to ease.

According to Charles Schwab strategists, home prices have likely hit their peak, with a predicted “stabilization” in sales and price growth on the horizon.