The published home price index showed that home prices in 20 U.S. cities fell 1.3 percent in August, the biggest drop since March 2009. It was the second consecutive monthly decline in the index.

The housing market is beginning to tighten as the Federal Reserve raises interest rates to curb the worst inflation in decades. Although growth has slowed, home prices remain high in many cities compared to last year.

With mortgage rates approaching 7%, many potential buyers are being turned away and some sellers have retreated.

Given the continued outlook for a challenging macroeconomic environment, home prices are likely to continue to slow.

Miami, Tampa and Charlotte were the three largest home price gainers in August, with year-over-year gains of 28.6%, 28% and 21.3%, respectively.

While home prices are still rising year-over-year, they are slowing at a record pace. the national home price index rose 13 percent year-over-year in August, down from 15.6 percent in July and the largest decline in the index's history.

The West Coast is one of the regions most affected by the real estate cooling, in part because affordability concerns have been mounting in recent months as interest rates have risen. On a year-over-year basis, West Coast cities, including San Francisco, Seattle and San Diego, saw the largest declines.

In recent months, market changes have begun to cool the home buying boom during the epidemic, when homes were quickly snapped up.

National Association of Realtors (NAR) data showed that home sales fell for the eighth straight month in September, while recent government data also showed that new housing starts also fell in September.

As we enter the colder months of the year, we can expect home sales to fall further and prices to continue to fall.

Builders have been hit by the sudden slowdown in the market, with falling demand, a sharp increase in cancelled deals and a significant drop in orders in the third quarter.