New York (CNN) Even the wealthiest Americans are starting to feel the effects of economic uncertainty, as sales of luxury homes saw their largest decline since the start of the pandemic, a Redfin analysis found.
Sales of luxury homes plummeted 17.8% year over year during the three months ending April 30. That's a much larger decline than non-luxury homes, which fell only 5.4% in the same period.
The only two times this decade when the drops were steeper came during the 2020 pandemic, when the market fell as much as 23.6%.
The high-end housing market is cooling down after an 80% surge in sales last year, thanks to rising interest rates, soaring inflation, a shaky stock market and uncertain economic outlook. Higher mortgage rates can translate to monthly housing bills increasing by thousands of dollars for the most expensive homes, Redfin said.
Mortgage rates climbed again last week after staying mostly flat for a few weeks, rising in anticipation of Friday's inflation data, said George Ratiu, Realtor.com's senior economist and manager of economic research.
Redfin said luxury home sales began to cool off this time last year, when there was a shortage driven by wealthy remote workers who wanted to leave cities and take advantage of low mortgage rates.
"The good news for buyers is the market is becoming more balanced and competition is easing up," said Elena Fleck, a Redfin real estate agent in West Palm Beach, Fla. "Of course, that doesn't help the scores of Americans who have been priced out altogether."
Prices are still rising for luxury homes -— though not at the same rate as a year ago. The median sale price rose 19.8% year over year to $1.15 million, down from its peak of 27.5% in the spring of 2021. Pre-pandemic, year over year price increases held steady at less than 10%. Fleck said sellers are now willing to lower asking prices as demand cools and the housing shortage eases.
Redfin has been tracking of this data since 2012, qualifying luxury homes as those in the top 5% based on local market value. Non-luxury homes are between the 35th and 65th percentile based on market value.
Nassau County, New York, saw a 45% decline in luxury home sales. Metro areas including Oakland, California, West Palm Beach, Florida and Dallas and Austin, Texas, all saw declines of sales of more than 30%.
--CNN Business' Anna Bahney contributed to this report.