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Even in a hot housing market, some sellers routinely lower their list price. The seller may decide that he wants to test the limits of the market, only to find out that he has become too greedy. Sometimes it’s even intentional: this low price tag certainly makes buyers feel like they’re getting a deal.

But if there is a sharp jump in price declines in the regional housing market, this usually means that the situation is starting to cool down. This is exactly what we see now.

Among 108 regional housing markets measured by Redfin, 102 saw a spike in price declines in May compared to the same month last year. Back in May 2021, in a typical market, 15.7% of listings received a price cut. In a typical market in May 2022, 25.7% of listings received a price cut.

This fast cooldown-which the Luck duplicated Great slowdown— hardly even. Of the 108 regional housing markets that Redfin measured, 29 had home prices cut by more than 30% in May.

The regional housing markets that have seen the biggest price declines are precisely in the places that have grown the most during the pandemic. Look no further than Provo, Utah. The market, located just a short drive from several ski slopes, has seen a huge influx of remote workers during the pandemic. Between May 2020 and May 2022, house prices in Provo rose by 65.7%, well above the 37% jump that occurred in the country during the first 24 months of the pandemic. But when the pandemic-driven housing boom fizzled out last month, things quickly changed. In May, a staggering 47.8% of Provo sellers lowered their list prices. This is up from 12.2% in May 2021.

Check out this interactive chart on Fortune.com

Provo is immediately followed by Tacoma, Washington (where 47.7% of listings received price cuts); Denver (46.9%); Salt Lake City (45.8%); Sacramento (44.3%); Boise, Idaho (44.2%); Ogden, Utah (42.6%); Portland, Oregon (42.0%); Indianapolis (41.9%); and Philadelphia (41.2%).

But make no mistake: these list cuts don’t mean house prices are falling year after year across the country. At least for now. It’s normal for house prices to start dropping month after month as the hot spring market fades and the slower summer months roll in. – historically rare – will appear.

Check out this interactive chart on Fortune.com

This nationwide cooling of the housing market is deliberate.

Earlier this year, The Federal Reserve has made it clear it is moving into inflation-fighting mode. What saw financial markets quickly raise mortgage rates. Over the past six months this has sent the average 30-year fixed mortgage rate rose from 3.2% to 6.07%. This is a more serious matter than it seems at first glance. If a borrower had taken out a $500,000 mortgage in December at a fixed rate of 3.2%, they would have seen a principal and interest payment of $2,162. At a rate of 6.07%, this amount rises to $3,020 per month for 30 years.

What jump in mortgage rates, coupled with record house price increases, has squeezed out many potential homebuyers. Some borrowers, who must meet a strict debt-to-income ratio, have been ineligible for mortgages altogether. All this destruction of demand was enough to send the US housing market into cooling mode.

Even the source this data not spared. Just last week Redfin announced the dismissal of 8% of its staff. Cause? “Redfin revenue shortfall, not layoffs… With May demand 17% lower than expected, we are short of work for our agents and support staff,” the company wrote.

Where are we heading next? The cooling in the housing market should continue to intensify during the summer months. Freddie Mac Deputy Chief Economist Len Kiefer says we have entered into “the most significant decline in activity since 2006”. As home sales fall and inventories rise, the chances that home prices may actually fall year-on-year increase.

“I would say that if you are a homebuyer… or a young person looking to buy a house, you need to reset a bit. We need to get back to a place where supply and demand are back together and inflation is low. again, and mortgage rates are low again, Fed chief Jerome Powell told reporters about this last week..

If you’d like to keep up to date with changes in the housing market, follow me on Twitter at @NewsLambert.

This story was originally published on Fortune.com

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