The U.S. housing market is cooling as overinflated home prices, high mortgage rates, rising inventory, and weakening demand take their toll.

Home price growth slowed to 1.3% in June—its lowest in two years—while nearly one-third of major markets are seeing annual price declines of at least 1%.

Inventory rose 29% from last year, though gains are tapering.

High mortgage rates, averaging in the high 6% range, are also dampening demand, CNBC has reported.

Regional trends vary: prices are rising in the Northeast and Midwest but falling in the South and West, with Cape Coral, Florida, seeing the steepest drop at over 9%.

Written by B.C. Begley