Homebuilder confidence has been taking a nosedive for eight straight months as the pandemic housing frenzy dies down yet supply chain issues continue, prompting some experts to warn the housing market correction is only beginning.

Housing Market Collapse: What’s Happening?

August marked the eighth consecutive month that homebuilder confidence fell as higher interest rates, high home prices and supply chain problems persist, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Monday.

“In another sign that a declining housing market has failed to bottom out, builder confidence in the market for newly built single-family homes fell six points in August to 49, marking the first time since May 2020 that the index fell below the key break-even measure of 50,” a National Association of Home Builders news release stated.

Housing recession

Inflation, higher construction costs and higher mortgage rates are continuing to “weaken market sentiment for single-family home builders,” National Association of Home Builders chairman Jerry Konter said in a prepared statement.

Konter, a homebuilder and developer from Savannah, Georgia, said a “troubling sign” that would-be homebuyers are “now sitting on the sidelines due to higher housing costs” is that buyer traffic in the association’s builder survey was 32, “the lowest level since April 2014,” excluding the spring of 2020 when the pandemic first hit the U.S.

Robert Dietz, the National Association of Home Builders chief economist, labeled today’s climate a “housing recession.”

“Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession,” he said, predicting “the total volume of single-family starts will post a decline in 2022, the first such decrease since 2011.”

However, Dietz added that as signs indicate inflation is peaking, interest rates are stabilizing, “which will provide some stability for the demand-side of the market in the coming months.”

Home builders slash prices

About 1 in 5 home builders (19%) reported cutting prices over the last month to increase sales or limit cancellations, according to the National Association of Home Builders Association’s survey.

Of those who reduced prices, the median price cut was 5%, according to the survey.

Meanwhile, 69% of homebuilders in the survey reported higher interest rates as the main culprit for falling housing demand.

Home market downturn?

Some experts warn the latest homebuilding data hints the market hasn’t yet bottomed out.

“In short, the housing downturn has some way yet to run,” Pantheon Macro chief economist Ian Shepherdson told Fortune, calling it “grim” data. He also noted the home builder index has failed to surpass economist projections every month since January.

The survey also showed present and expected sales also fell again in August, maintaining the “steep and sustained” decline in mortgage demand, which has plummeted nearly 30% from a December peak, Shepherdson said.

“The collapse points to clear and substantial downside risk for housing construction over the next few months, as builders try to manage their excess inventory,” Shepherdson told Fortune. “That will be impossible without hefty price declines, now that developers are competing with rapidly rising inventory in the existing homes market.”