Analysis by real estate firm Zillow found that home prices in the United States had fallen for the first time in a decade after skyrocketing in recent years, driving many out of the home ownership market.

That report of the online company found that its Zillow Home Value Index fell 0.1% from June to July.

“The market is quickly rebalancing. With nearly two years of double-digit price growth and higher mortgage rates squeezing buyers’ purchasing power, competition for homes is fading,” the report said.

The price drop came after a report from the National Association of Realtors said July home sales fell 20% yoy and 6% mom.

Despite the slight decline in price, a typical home in the US is up 16% over last year’s price, or $357,107.

Experts say the sudden rise in mortgage lending rates has pushed many buyers out of the market and led to lower demand for housing.

“This slowdown is about discouraged buyers pulling away after the affordability shock from higher interest rates. As prices soften, many will renew interest and we will resume our progress back to ‘normal’,” said Zillow chief economist Skylar Olsen.

Zillow has too projected that US home prices will rise from 2022 to 2023, but only by 2.4%, far less than they previously predicted.

A separate analysis von Redfin noted that some markets that had boomed during the pandemic saw a surge in home sellers slashing their prices. Among the worst were Boise, Idaho, and Tampa, Florida.

The Federal Reserve has raised the national base rate to keep the economy from fueling inflation from overspending during the coronavirus pandemic. Fed Chair Jerome Powell has indicated they may hike rates further to prevent the economy from overheating further.

“It’s important that we bring inflation down if we want a sustained period of strong labor market conditions that benefit everyone,” Powell said in July.

Critics fear the move could plunge the country into a recession, especially as gross domestic product has fallen for two consecutive quarters, the widely accepted definition of a recession.

Find out more about the changing housing market here:

We’re in the middle of a housing recession: The Economist Home prices have fallen for the first time in a decade, according to Zillow

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