This graph shows the relationship between months of supply of existing homes (for sale # / monthly sales rate) and the rate of change in prices. The vertical axis has tighter supply at the top, and the horizontal axis has rapid price increases on the right.
As you'd expect, over the last 22 years, when supply gets tight, prices rise quickly...and when there are too many sellers and not enough buyers, prices decline.
But something different is happening. The supply of homes for sale is roughly in line with the rate of sales, yet prices are dropping anyway. (See the black triangles.) My interpretation is that this is due to extremely high mortgage rates, but it isn't entirely clear how that would happen. (High mortgage rates would obviously limit what some buyers can offer, but it's not clear why sellers would drop their price when sales are still moving along well. Similarly, high interest rates tend to reduce supply as owners are reluctant to move and take on a higher rate, but this hasn't shown up much yet.)
Anyway, rapid price drops around 1% a month are happening in most parts of the country, and will likely continue until mortgage rates decline.