Pending home sales posted a record drop last month, while the number of cancellations and price cuts hit a record high, according to a new Redfin report. 

October pending home sales fell 32.1% from last year, the largest decline since 2013. During that same period, 17.9% of all homes that went under contract had their purchase agreements fall through and 23.9% of homes on the market had price drops, nearly doubling from 2021. 

But there is some good news, according to the report: this historic slowdown could ease in the coming months if inflation continues to cool. 

October also saw the steepest decline in new listings since the start of the pandemic, falling 24% year over year. Redfin attributes that drop to more potential sellers choosing to stay put due to higher mortgage rates. October’s 30-year-fixed mortgage rate was 6.9%, a 3.83 percentage point increase from last year and the largest monthly year-over-year increase since 1981. 

Redfin economics research lead Chen Zhao said the Fed’s actions to curb inflation are causing the housing market to slow at a pace not seen since the financial crisis.

“There are already early but promising signs that inflation is cooling, which caused mortgage rates to drop last week,” Zhao said. “If that progress continues, buyers who recently backed out of deals may return to the market and sellers may be less inclined to slash their prices.”

October’s median home sale price fell 1.4% month over month to $397,549 but was up 4.9% from 2021. 

Meanwhile, homes stayed on the market for 21 days longer than they did a year ago at a median of 35 days, with only 44.6% of them facing competition. Last October, 67.3% of homes were in bidding wars.