The housing market has lost some of its momentum recently according to a new study by the Redfin Research Center. Pent-up demand and low mortgage rates contributed to a robust real estate market since the beginning of the year, but higher prices and higher rates have diminished demand in recent months.

“In August, 26.4 percent of active listings had their prices lowered, the highest in four years,” said Tommy Unger, the report’s author. “With buzz of a strong housing market and home prices on the rise, sellers had unrealistic expectations about the price they could get for their home. With the relatively sudden softening in buyer demand, many sellers had to ultimately reduce their prices.”

Unger predicts that mortgage rates will play the central role in determining housing prices moving forward.

“We expect mortgage rates may show volatility this autumn as the Federal Reserve weighs whether to begin tapering its stimulus program,” Unger said. “If rates do rise sharply in September and October, buyers are likely to temporarily step out of the market. This probably would lead prices and sales to dip sharply around the holiday season. If rates remain stable, however, we would expect prices to flatten this autumn and sales to wind down slowly as the holiday season nears. Inventory, on the other hand, is likely to slowly drop in line with seasonal trends.”