Nearly two-thirds of builders surveyed reported a year-over-year decrease in sales in September, according to the BTIG/HomeSphere State of the Industry Report published on Monday.

At 63%, this is the largest share of builders to experience an annual decrease in sales in the survey’s 59-month history. A year ago only 25% on respondents reported a decrease in sales.

“Business conditions are deteriorating at an accelerating rate due in our view to higher mortgage rates, fear of falling real estate values and weaker economic conditions among consumers, a lag in some builder reactions to negative conditions, and to some extent seasonality,” Carl Reichardt, a BTIG analyst, said in a statement.

The BTIG/HomeSphere study is an electronic survey of approximately 50-100 small- to mid-sized homebuilders that sell, on average, 50-100 homes per year throughout the nation. In September the survey had 111 respondents. Although 10 of the 111 respondents are based in Florida, no particularly negative responses due to hurricane impacts were noted.

In total, just 7% of respondents reported higher year over year sales in September, down from 17% in August and 34% in September of 2021.

In addition to a survey-record low reading for the number sales, buyer traffic also came in at a record low, with just 12% of respondents reporting a year-over-year traffic increase compared to 17% a month prior, while 61% reported annual declines in traffic, up from 53% in August 2022. Overall, 13% of respondents reported that traffic was better than expected and 40% viewed it as worse.

Also hitting a record low was the number of builders reporting better than expected sales, with just 10% September sales exceeded their expectations. The 48% of builders who saw sales as worse than expected for the month was a record high.

Based on the survey data for traffic and demand, BTIG forecasts that the National Association of Home Builders’ Housing Market Index (HMI) gauging builder sentiment, scheduled to come out on Tuesday, will come in lower than the current Factset consensus expectation of 45.

As buyer demand and traffic has decreased, builders are cutting prices and increasing incentives to drive up sales. In September, 47% of builders lowered come base prices, up from just 37% a month ago, while 24% raised some, most or all base prices, down from 29% in August. The share of builders increasing sales incentives also rose compared to a month prior, with 44% of builders reporting increase sales incentives on at least some homes versus 38% in August.