Just look at July inventory data. Active listings on realtor.com jumped 128,200 last month to 747,500. That’s the single biggest jump in the site’s database that goes back to 2016. The previous record hike was May 2022 (+106,900 homes), which nearly got surpassed by the June 2022 jump (+102,900 homes).

While inventory usually rises around this time of year, seasonality alone can’t explain this jump. The culprit is the ongoing housing cool-down. Simply put: We’re watching the U.S. housing market flip from the pandemic housing boom into the pandemic housing slump.

“The rise in interest rates, even after accounting for the recent pullback, combined with higher home prices have pushed the cost of homeownership up 30% since the start of the year. At the same time, general angst about the economy, job security, and inflation is playing into the consumer mindset,” Ali Wolf, chief economist at Zonda, tells Fortune. “Many [buyers] have found themselves debating whether they want to make one of the biggest purchases of their lives today or if they’d rather wait.”

Spiking mortgage rates pushed the entire U.S. housing market into cool-down mode—but some markets are cooling much faster than others. Some have even seen inventory levels reach a level where home price declines can begin.

Let’s take a look.

Among the 917 regional housing markets tracked by realtor.com, 898 saw rising inventory levels—the number of unsold listings—between March and July. Of those, 346 markets saw at least a 100% uptick. In 57 markets, inventory rose by over 200%. That includes Idaho Falls, Idaho (387% uptick); Ogden, Utah (372% uptick); Provo, Utah (371% uptick); Coeur d'Alene, Idaho (365% uptick); and Salt Lake City (355% uptick).

It’s clear that Mountain West, Southwest, and Southeast regional housing markets are seeing the swiftest corrections. Many of these markets, like Austin and Phoenix, were among the go-to spots for pandemic movers. These markets attracted hordes of white-collar professionals who realized COVID-19 had given them the ability to work remotely on a permanent basis. Ironically, many of the markets they fled, like San Francisco and Seattle, are also seeing swift corrections.

"The market felt like it was in a state of free fall for some markets in the Southeast and Mountain West over the past couple of months with cancellations rising, homes sitting on the market longer, and more homes posting price drops," Wolf says. "In some of the hardest-hit markets, there are signs that housing demand is starting to flatten out, albeit at low levels compared to what we’ve seen over the past two years. Consumer confidence and housing affordability will be the key indicators to watch to see how long this trend lasts."

While inventory levels are rising fast—up 96% since March 2022—they remain far below pre-pandemic levels. Nationally, active listings in July 2022 were 44% below July 2019.

Among the 917 markets tracked by realtor.com, 35 have inventory levels above July 2019. That's up from June, when just 18 markets were above pre-pandemic inventory levels. However, it shows we still have a long way to go until we're back to normalcy.

But balance could soon be on the way. Logan Mohtashami, lead analyst at HousingWire, thinks we could reach pre-pandemic inventory levels in 2023. Heading into 2022, Mohtashami was on "team higher rates." In his mind, spiking mortgage rates were the only way to pull us out of an "overheated" housing market where historically tight inventory levels gave home shoppers little choice but to engage in bidding wars.

There's another reason to expect more inventory: Homebuilders currently have both a record number of homes under construction and a record number of unsold homes under construction. Those builders are already struggling to sell. As those new abodes hit the market, some regional housing markets could get temporarily oversupplied.

"I think there’s full awareness that in some markets, an increase in inventory may hit at a bad time—a time where demand has notably pulled back," Wolf tells Fortune. "Housing is believed to be structurally undersupplied but we run the risk of finding more homes on the market than buyers in the near term due to cyclical factors."

Fast-growing markets like Atlanta, Austin, Dallas, Houston, and Phoenix are particularly vulnerable to temporary oversupply.

Detached from economic fundamentals

Regional housing markets that became the most detached from underlying economic fundamentals are now cooling fastest. These bubbly or frothy markets, including places like Denver and Nashville, simply saw home prices climb too high during the pandemic. Once historically low mortgage rates disappeared this spring, would-be buyers began to feel the full brunt of record home price appreciation. That saw some buyers call off or pause their search.

Simply being overvalued relative to underlying economic fundamentals doesn't guarantee a home price correction. That said, significantly "overvalued" housing markets are, historically speaking, at a greater risk of home price declines. According to Moody's Analytics, regional housing markets that are currently "overvalued" by more than 25% are very likely to see home prices decline between 5% to 10% over the coming 12 months.

According to John Burns Real Estate Consulting, we've already seen a few housing markets, like Las Vegas, reach inventory supply levels that make it likely home prices will fall.

But nationally at least, industry insiders have mixed feelings about home price declines.

Forecast models produced by the Mortgage Bankers Association, Fannie Mae, Freddie Mac, CoreLogic, and Zillow all have U.S. house prices moving higher over the coming year. Meanwhile, modest home price declines are currently being forecast by John Burns Real Estate Consulting, Capital Economics, Zelman & Associates, and Zonda. That's hardly a consensus.

Want to stay updated on the housing cooldown? Follow me on Twitter at @NewsLambert.