A decade-long rally in U.S. home prices could finally come to an end once the Federal Reserve stops its rate-hiking cycle, said Robert Shiller, professor of economics at Yale University.

Home prices have made steady gains since 2012, according to the S&P Case-Shiller U.S. National Home Price Index.

“The fear of interest rate increases has influenced people’s thinking — it’s not just the homeowners, it’s new buyers who wanted to get in before the interest rates went up even more,” Shiller said.

“They wanted to lock in. So that’s been a positive influence on the market. But it’s coming to an end,” he added.

Shiller noted that the index reflected “unusual behavior” in the last six months, saying prices “seemed to be fine and then it started to go up.”

U.S. Home prices notched a record high in May, rising 0.7% nationally from April at a seasonally adjusted rate, according to data from another benchmark, the Black Knight Home Price Index.

“I think … people don’t know what to make of the ‘what is the Fed going to do?’ situation,” Shiller said.

The Fed indicated during its June meeting that further tightening is likely, but at a slower pace than the rate increases that characterized monetary policy since early 2022.

“We’ve seen a dramatic increase in interest rates since a couple of years ago. And I think there’s a sense that that’s enough,” the professor said, adding that a soft landing is a possibility, though it’s unlikely to be a “perfect” one.

Shiller added, however, that he’s “not panicking,” saying part of the recent spike in home prices is “just seasonal,” noting that prices typically go up in the summer.

The Fed is due to meet on Wednesday. Economists polled by Reuters forecast an interest rate hike of 25 basis points.