The U.S. housing market is taking a hard hit from higher mortgage rates, and luxury home sales are seeing the worst of it.

Sales of luxury homes dropped 45% during the three months ended Jan. 31 compared with the same period the year before, according to Redfin, a real estate brokerage. Redfin defines luxury homes as those estimated to be in the top 5% based on the estimated market value. Sales of non-luxury homes were down about 38% during that period.

Miami, which had seen a massive influx of wealthy buyers migrating from the Northeast in the earlier days of the Covid pandemic, saw sales drop nearly 69%. That was followed by the Nassau County-Suffolk County region on New York’s Long Island, home to the Hamptons – down nearly 63%. Some of the priciest California markets also saw big drops in sales because they, too, experienced big pandemic sales.

While not all luxury buyers use mortgages, they are affected by the broader economy, and more specifically the stock market. Volatility in financial markets is therefore having an outsized effect on the luxury real estate market.

“The silver lining for the luxury buyers who are still in the market is that competition is sparse, and jumbo loans now often have lower mortgage rates than other loan types, in part because there’s less risk that high-end buyers will default on their mortgages,” said Chen Zhao, Redfin economics research lead in a release. “Wealthy house hunters are also frequently offered additional rate discounts from their banks as a perk for storing substantial funds there.”

Competition is easing not just because of falling demand. Supply is rising. Inventory rose 7% year over year, which was the largest increase since 2015.

Yet supply is also still historically tight – not that much higher than the record lows of 2022. New listings are also down 22%, indicating that supply is higher because homes are sitting longer.

That lack of supply has pushed luxury home prices higher. The median price was up 9% compared with the same period the year before to $1.09 million. Luxury prices hit an all-time high of 1.1 million in the spring of last year.