“Today’s layoff is the result of shortfalls in Redfin’s revenues, not in the people being let go…with May demand 17% below expectations, we don’t have enough work for our agents and support staff,” wrote Redfin in a statement announcing the 470 job cuts. Compass also cited the housing slowdown as the culprit for its 450 layoffs.

In April, the U.S. housing market entered into slowdown mode. But as data rolls in for May and June, we’re learning that this isn’t a mild slowdown—it’s an abrupt shift. Moody’s Analytics chief economist Mark Zandi tells Fortune we’ve gone from a housing boom into a full-blown “housing correction” and will soon see the year-over-year rate of home price growth fall from a record 20.6% to 0%. If a recession does materialize, Moody’s Analytics expects a 5% nationwide home price drop—including a 15% to 20% drop in America’s most “overvalued” regional housing markets. While Zandi doesn’t expect a 2008-style housing bust, he’s closely monitoring the situation.

What pushed the housing market over the top? A combination of sky-high home prices, which have become detached from underlying economic fundamentals, and soaring mortgage rates that have caused homebuyers to finally push back. Buyer demand is falling—fast.

Over the past six months, the average 30-year mortgage rate has spiked from 3.1% to 6.28% as the Federal Reserve flipped into inflation-fighting mode. Mortgage rates are now at their highest level since 2008. The 3.18 percentage point jump also marks the biggest upward swing in mortgage rates since 1981—a year that saw the average 30-year fixed rate notch above 18% as the Federal Reserve successfully worked to tame the inflationary period that took off during the ’70s.

Rising mortgage rates mean some borrowers, who must meet lenders’ strict debt-to-income ratios, lose their mortgage eligibility altogether. Others, just have to pony up more—a lot more.

If a borrower took out a $500,000 mortgage in June 2021 at the then average fixed rate of 3.1%, they’d owe $2,135 per month. At a 6.28% rate, that principal and interest payment comes in at $3,088. But that’s assuming flat home price growth. Now let’s say that house saw price growth of 20.6% (i.e., the latest year-over-year reading for home price growth). That would push the mortgage to $603,000. At a 6.25% fixed rate, a $603,000 mortgage comes with a $3,725 monthly payment. Going from $2,135 to $3,725 is a 74% jump.

That hypothetical isn’t too far off from reality. Ali Wolf, chief economist at Zonda, a real estate research firm, provided mortgage calculations for America’s 100 largest regional housing markets to Fortune. The finding? Over the past six months, the typical new mortgage payment has spiked 52%. In some markets, including Tampa and Raleigh, N.C., it’s up over 60%.

Of course, as mortgage rates climb and homebuyers get locked out, the slowdown in activity is a threat to the entire industry. Cue layoffs at Redfin and Compass.

And those layoffs are hardly an anomaly.

Several weeks ago mortgage lenders started slashing their headcounts as higher mortgage rates dealt a knockout blow to mortgage refinances (down 75% year over year) and saw purchase applications (down 20.5% year over year) also slow dramatically. Now, the financial carnage is sprawling beyond mortgage companies.

If the stock market is any indication, Zillow could also be feeling the pinch. Over the past three months, shares of Compass and Redfin were down 38% and 51%, respectively. Meanwhile, Zillow was down 33% during the same time frame.

The accelerating housing “correction” also means companies like Redfin and Zillow have surrendered all of their stock gains accumulated during the pandemic’s housing boom. Over the past 24 months, shares of Redfin are down 74% while Zillow shares are down 43%. Since its initial public offering in April 2021, Compass shares are down 79%.

What should we expect next? As home shoppers continue to back off, cooling will also intensify. In the coming months, we should see the U.S. housing market notch its “most significant contraction in activity since 2006,” tweeted Freddie Mac deputy chief economist Len Kiefer on Thursday.

But don't pencil in a housing bust—at least not yet, says Logan Mohtashami, lead analyst at HousingWire.

The National Association of Realtors reports U.S. housing inventory inched up to 1.03 million heading into May. To get a “normal” housing market, we’d first need to see inventory rise to a range of 1.52 million to 1.93 million housing units. Once it’s over 2 million units, Mohtashami says, U.S. home prices could start falling on a year-over-year basis. He hopes they do eventually fall because, in his eyes, this spring they simply got too high.

If you’d like to stay informed on the shifting housing market, follow me on Twitter at @NewsLambert.