TAMPA, Fla. (WFLA) — In the biggest drop since the start of the COVID-19 pandemic in March 2020, Redfin real estate reported luxury home sales ‘sank’ 18% from February to April 2022. It’s the biggest decline since June to May 2020.

Home sales were already starting to slow down as Federal Reserve interest rates were increased, adding higher monthly costs to mortgaging a home. The rate increases were an effort by the U.S. government to combat inflation.

Friday’s inflation report for May showed that while the rate of inflation had dipped slightly in April, it was back up in May, putting the score at 8.6% on the latest Consumer Price Index from the Bureau of Labor Statistics. The new inflation level is the highest since 1981, according to BLS.

While luxury home sales fell almost 20%, the sale of non-luxury homes only decreased slightly, 5.4% lower during the same three-month period through April.

Redfin “defines luxury homes as those estimated to be in the top 5% based on market value, and non luxury homes as those estimated to be in the 35th-65th percentile based on market value.”

The real estate company said that higher mortgage rates mean higher monthly housing bills, sometimes thousands of dollars more expensive than previous costs. Redfin said it was causing the luxury market to cool, as the interest rates increase and the stock market becomes “tepid.” They said inflation rates and economic uncertainty continue to lessen demand for luxury homes.

“The pool of people qualified to purchase luxury properties is shrinking because the stock market is falling and mortgage rates are rising,” Elena Fleck, a Redfin real estate agent in West Palm Beach, Fla. said. “The good news for buyers is the market is becoming more balanced and competition is easing up. Of course, that doesn’t help the scores of Americans who have been priced out altogether.”

While inflation rises, and luxury home sales decline, asking rent levels across the U.S. were up., particularly in Tampa.

Tampa’s median asking rent price hit $2,188 in May, a 22.4% jump, according to a rental data report by Redin. May was the first month where asking rent prices were over $2,000, according to the real estate company.

New reports from Wall Street showed stocks slide downward following the new inflation report, again adding concern over the country’s economic strength. The Associated Press reported the Dow Jones Industrial Average was down 772 points as of about 10:30 a.m., Friday.