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Talk about a 180. Not only has the Pandemic Housing Boom—which pushed U.S. home prices up 42% over the past two years—fizzled out, but we’ve seen it replaced by a “housing recession.” Across the nation, home sales are plummeting and inventory levels are spiking. This economic contraction has housing slowing down at its fastest clip since 2006.

Heading forward, the housing market will continue to slow. The Federal Reserve put upward pressure on mortgage rates as a way to temporarily sideline homebuyers. The subsequent decline in home sales creates economic contractions across the economy. It’s already causing layoffs in sectors like homebuilding and mortgage lending. Soon, it’ll see cutbacks in durable good production, like window production, and cutbacks in commodities like lumber and steel. As economic contractions spread throughout the economy, it should help to chip away at inflation.