Ian Shepherdson, chief economist and founder of research consulting firm Pantheon Macroeconomics, predicts existing-home sales will tumble 25% between February and the end of summer. In real numbers, that brings the annual pace from 6.02 million to 4.5 million.

“The housing market is in the early stages of a substantial downshift in activity, which will trigger a steep decline in the rate of increase of home prices, starting perhaps as soon as the spring,” Shepherdson wrote in a note.

The prediction is based upon data from the Mortgage Bankers Association that shows an 8% decline in loan applications. That comes as the average monthly mortgage payment has increased by over $400 per month, Shepherdson calculates. And it could be a canary for the housing industry.

Should the market slow down, he notes, many potential sellers could opt not to list, in an effort to not “be the last person trying to sell into a falling market.” That would hurt existing market supply issues even more.

The slowdown could impact new-home sales, in addition to existing homes, he says. And that could have some more severe long-term economic impacts.

“A sustained drop in home sales—new-home sales will fall too—would be a direct drag on GDP growth, at the margin, via downward pressure on residential investment, and all the services—legal, removals, and others—directly tied to sales volumes,” he said. “It would also depress retail spending on building materials, appliances, and household electronics.”