The overall worth of U.S. houses has fallen from a document excessive of $47.7 trillion in June to about $45.3 trillion on the finish of final yr—representing the biggest June-to-December drop because the subprime mortgage disaster was unraveling in 2008, actual property brokerage Redfin reported Wednesday.

Although dwelling costs are up about 1.5% over the previous yr, the median worth has fallen about 11.5% from a peak of $433,133 in Might to $383,249 in January, as larger mortgage charges (fueled by the Federal Reserve’s inflation-fighting coverage) drive up borrowing prices and sideline potential homebuyers; final week, U.S. dwelling buy functions fell to a 28-year low.

Hardest hit areas embody areas adversely affected by waves of know-how layoffs and skyrocketing costs through the pandemic, together with San Francisco (the place dwelling costs fell almost 7% yr over yr), Oakland (down 4.5%) and New York (down 1%).

“The housing market has shed a few of its worth, however most owners will nonetheless reap massive rewards from the pandemic housing growth,” says Redfin economist Chen Zhao, noting the whole worth of houses stays about $13 trillion larger than in February 2020—earlier than the pandemic abruptly tanked the financial system.

However, costs are more likely to solely fall additional: “The massive story for 2023 would be the pace and extent” to which the decline in costs follows swimsuit with the collapse in present dwelling gross sales, which have plummeted almost 40% from their pandemic peak, says Pantheon Macro economist Kieran Clancy.

Pantheon in the end tasks dwelling costs will fall by about 20% from their peak by the tip of this yr, suggesting the median worth might tumble one other 10% to about $346,500, per Redfin’s information.