Home sales, construction volumes, and now even home prices in many markets (the last shoe to drop in a housing correction) are all falling.  Clearly, the fact mortgage rates exploded from a low of 2.6% in December 2020 to six percent in early September is handcuffing many would-be homebuyers.

The last time mortgage rates flirted with even just 5% was fall 2018, a brief period lasting two months, during which housing demand quickly contracted. Affordability improved as mortgage rates fell to 4.5% by December 2018. Housing was off to the races by early 2019, with rates staying below 5% up until April 2022.

We’re now in the sixth straight month of a 5%+ mortgage rate backdrop, and housing is struggling to find a bottom.

The 5% mortgage rate threshold

Why the focus on 5% mortgage rates as a trigger for homebuyer malaise? While rock bottom mortgage rates in 2020-2021 provided the key for housing hitting escape velocity, they’re now locking up homeowners who purchased or refinanced during this once-in-a-generation financing window.

Consider that 85% of outstanding mortgages are locked in at sub-5% rates, with 24% sitting at seductively low sub-3% levels. Good luck persuading someone to relinquish their sub-3% or even 4% fixed-rate mortgage when inflation is at a 40-year high and the cost of everything is wildly volatile.

In fact, according to a recent survey from the New Home Trends Institute, 64% of existing homeowners with a mortgage won’t purchase again if the mortgage rate exceeds 5%. The percentage of existing homeowners unwilling to purchase again at 6%+ mortgage rate jumps to 85%. Existing homeowners account for 51% of all home purchases and overwhelmingly require a mortgage according to the National Association of Realtors, so any obstacle to their homebuying activity weighs heavily on total housing transactions.

Knowing that existing homeowners account for 51% of all home purchases and 64% of them are reluctant to buy again at 5%+ mortgage rates means 33% of housing transactions could quickly vanish in the near term. At 6%+ mortgage rates, a staggering 43% of home purchases could disappear. These percentages are alarming, and likely reflect today’s abysmal for-sale affordability backdrop, which remains at an all-time worst.

Don’t count on adjustable-rate mortgages (ARMs) to offset the affordability squeeze

In addition to the low-rate lock-in effect deterring home purchase activity for existing homeowners, stricter underwriting guidelines on adjustable-rate mortgages (ARMs) post Dodd-Frank are likely reducing potential home purchases for all homebuyers.

Whereas prior to the Great Financial Crisis homebuyers qualified at the low introductory teaser rate on ARMs, post-Dodd-Frank buyers must typically qualify at the higher resetting rate to avoid payment shock. For perspective, ARMs accounted for 17% of all mortgage originations from 1990-2008, serving as an affordability pressure release valve in all past rate spike cycles.

In the mid-1990s when 30-year fixed mortgage rates climbed over 9%, ARM usage jumped to 35% of all mortgages. In 1999-2000 as 30-year fixed mortgage rates shot above 8%, ARM usage raged once again to 34% of all mortgages. For comparison, the percentage of homebuyers using ARMs today is just 8.5%, even as housing affordability resides near its all-time worst and 30-year fixed-rate mortgages have more than doubled in the span of 19 months.

Moreover, the interest rate spread between a 30-year fixed and adjustable-rate mortgage is the widest since 2014, indicating lower-than-usual ARM rates in relation to fixed rates. While prudent in the long term, the post-Dodd-Frank underwriting guidelines for ARMs are proving painful for housing in its first extended dance with elevated rates.

Home price declines will help reset affordability

We expect home price declines in many markets to improve affordability going forward, combined with rising incomes. This process should help nudge existing owners to purchase once again down the road, even if rates don’t revisit the historic lows of 2020-2021. Time will tell how long and how deep this recalibrating process takes before housing finds a floor.

View this interactive chart on Fortune.com

From our vantage point, the affordability medicine needed for many housing markets is double-digit price declines, particularly in the new home market. For perspective, the principal and interest payment on a $400,000 home loan at a 3.5% mortgage rate is around $1,800 per month. At a 5% mortgage rate, cutting the price on that same home by 16% results in the same ~$1,800 mortgage payment. Price cuts are powerful affordability levers.

A supply tsunami is unlikely, but don’t ignore the demand side of the coin

Barring job losses or sharp declines in income, homeowners that locked in 2020-2021 vintage fixed-rate mortgages will unlikely be forced home sellers. The same can be said for the lion’s share of homeowners avoiding the potential buzzsaw of resetting ARMs, which can also trigger forced sales.

Combined, these two forces should limit waves of housing supply from coming to market, which is a good thing, namely distressed sales. However, it remains to be seen whether these same forces will tie up and handcuff demand in a way housing has never faced during past rising rate environments.

Judging by the accelerating pace of softening across home sales, construction volumes, and now prices, it appears housing doesn’t have the keys to escape this downturn anytime soon.

Rick Palacios Jr. is director of research and managing principal at John Burns Real Estate Consulting.

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This story was originally featured on Fortune.com