Sales of luxury homes fell 28.1 percent year-over-year during the three months ending Aug. 31, according to Redfin. That’s the biggest decline since at least 2012, eclipsing the 23.2 percent plunge that occurred at the onset of the pandemic.

Sales of non-luxury homes also fell the most on record, decreasing 19.5 percent during the three-month period. That slightly outpaced the 19 percent decline during the three months ending June 30, 2020.

Rising interest rates, inflation, a tepid stock market and economic uncertainty are causing luxury buyers to back off, according to Redfin. While high-end buyers are more likely to pay in cash, many still take out mortgages, often as an investment strategy. The story in the luxury market is similar to the story in the overall housing market, but more extreme, Redfin Chief Economist Daryl Fairweather said.

“High-end-house hunters are getting sticker shock when they see the impact of rising mortgage rates on paper. For a luxury buyer, a higher interest rate can equate to a monthly housing bill that’s thousands of dollars more expensive,” Fairweather said in a release. “Someone who was in the market for a $1.5 million home last year may now have a maximum budget of $800,000 thanks to higher mortgage rates. Luxury goods are often the first thing to get cut when uncertain times force people to reexamine their finances.”

Expensive California markets are leading the drop in high-end-home sales. In Oakland, Calif., luxury-home sales plunged 63.9 percent year-over-year during the three months ending Aug. 31, the largest decline among the 50 most populous metro areas. San Jose and San Diego also experienced decreases of more than 55 percent.

Home-price growth in the luxury market is slowing as demand cools. The median sale price of luxury homes rose 10.5 percent year-over-year to $1.1 million during the three-month period, compared with an annual increase of 20.3 percent a year earlier and a record gain of 27.8 percent during the three months ending June 30, 2021.

Prices of luxury homes are rising at a slower pace than prices of non-luxury homes, which increased 15.5 percent year-over-year to $335,000 during the three months ending Aug. 31. That’s down slightly from an annual increase of 17.2 percent a year earlier and a record gain of 19.7 percent during the three months ending March 31, 2022.

Price growth in the luxury market is also likely decelerating in part because the supply crunch is easing overall, according to Redfin.

The number of luxury homes for sale fell 1.9 percent year-over-year to roughly 169,000 during the three months ending Aug. 31, compared with a record decline of 25 percent about a year earlier. Luxury-home supply is still down year-over-year but has increased from the start of the year. The number of luxury homes on the market is up 39.2 percent from a record low of roughly 121,000 during the three months ending Feb. 28.

The supply of non-luxury homes fell 3.5 percent year-over-year during the three months ending Aug. 31. That’s the first time in roughly two years that luxury-home supply fell at a slower clip than non-luxury supply.