John Matheson, a home inspector in Alameda, Calif., kept busy during the pandemic when the housing market was red hot. But as interest rates started to rise about halfway through 2022, he noticed that his workload began to drop. Last year, the number of jobs plummeted.

“My business is about 50% of what it was,” said Matheson, who works as a contractor for BPG Inspections, which provides services to homebuyers nationwide. “As far as I’m concerned, it’s a really bad year.”

So bad, in fact, that “I am actually thinking about side hustles,” he said, adding that he is studying to receive a commercial captain’s license in the hope of getting a job operating a ferry or another vessel if the housing market does not rebound.

High home prices and elevated mortgage rates, which squeezed the housing market last year, have dragged down a number of other related sectors, such as real estate services and mortgage lending. But housing is such a crucial cog in the U.S. economy that its slowdown has also threatened industries such as home improvement and storage.

“Existing home sales are under so much pressure,” said Sean O’Hara, president of fund-management firm Pacer ETFs. “We’re sort of exiting a phase where real estate, across the board, had an excellent environment.”

Sales of existing homes, which make up most of the nation’s housing stock, were down roughly 7% in November from a year earlier, according to the National Association of Realtors.

Federal Reserve policymakers held interest rates steady at their meeting in December and signaled that the central bank would begin cutting interest rates in 2024, offering hope to the residential market, which is more sensitive to interest-rate changes.

Factors that kept people from buying a home in 2023 were myriad, including soaring prices. The median price of an existing single-family home was $392,100 in November, according to the Federal Reserve Bank of St. Louis, making homebuying unaffordable for a large swath of the population, even as mortgage rates have dipped below 7%.

Would-be buyers are also facing a lack of houses on the market. Some homeowners don’t want to sell their homes and forfeit the low mortgage rates they landed just a few years ago. About 4 in 5 homeowners with mortgages have rates lower than 5%, and about a quarter have rates lower than 3%, according to a study conducted by the online brokerage Redfin. Even baby boomers who might consider downsizing are finding that it might not be cost-effective to take out new mortgages with rates at their current levels.

The contagion from the slowdown in the housing market last year has been wide-ranging.

Professionals including real estate agents and mortgage providers are the most visible collateral damage, but other service providers — such as title insurance companies, escrow companies, home appraisers and inspectors — are also seeing business dry up. Other once-hot markets are seeing a similar shift.

“Our best year in the business was 2021, at the height of COVID,” said Scott Patterson, owner of Trace Inspections, which provides home inspections in the Nashville, Tenn., area. “Then interest rates started going up, and people just stopped buying homes unless they really needed to.”

Patterson said a combination of low inventory and high mortgage rates was slowing the number of home purchases, particularly among first-time buyers.

“Folks that have been affected the most are people buying starter homes,” he said. “Interest rates are really hurting them. They’re the ones we’re not seeing as much.”

Companies involved in moving and storing people’s belongings are also coping with a slowdown that executives attribute to slumping home sales. In a call with analysts in August, Edward Shoen, president and CEO of U-Haul, blamed a contraction in moving activity for a decline in the company’s first-quarter revenue.

Demand for storage units boomed during the pandemic as people spent more time at home or took advantage of lower mortgage rates by buying homes. Developers capitalized on this, with investor funds fueling the construction of new storage facilities nationwide.

“What you had in the pandemic and post-pandemic was just an abundance of supply,” said Michael Elliott, an equity analyst at CFRA Research.

As pandemic-era consumption patterns have waned, some companies have struggled. In September, analysts at Morgan Stanley cut their target price of Extra Space Storage, and a Wells Fargo analyst published a research note warning about overall softness in the sector.

Storage businesses are having to choose between shoring up occupancy by cutting rates or increasing them to generate more revenue — at the risk of having customers defect to competitors.

Homeowners remodeled and redesigned during the pandemic, snapping up new recliners, refrigerators and widescreen TVs. Now, retailers face a challenging sales environment.

Demand for furniture, appliances and home electronics has fallen, according to a Bank of America analysis conducted in 2022. Fewer people buying homes has meant lower demand for big-ticket items such as sofas and home stereo systems, said R.J. Hottovy, head of analytical research at analytics firm Placer.ai.

So many people bought home furnishings during the pandemic years that those purchases supplanted those that might otherwise be taking place now, depressing demand further. As of the beginning of September, Placer.ai found, visits to home-goods retailers were down roughly 15% from a year earlier, and visits to electronics stores were down 12%.

Younger adults are a big potential source of demand for these kinds of goods, experts say, given that they would normally be seeking to buy homes to start families.

“I think a lot of millennials, in particular, are looking to move, to have a larger home,” said Timothy Chubb, chief investment officer at the wealth management firm Girard. “It’s been relatively impossible to do so, given a lack of inventory out there.”

That is translating into a decline in spending on durable goods, he said.

Home-improvement retailers face similar challenges. “Anything associated with moving is not happening, and that’s a lot,” said Scott Mushkin, the founder and managing partner of R5 Capital, a consulting and research firm.

Executives at Home Depot told investors on a third-quarter earnings call in November that Americans were buying fewer big-ticket items. Lowe’s reported lower spending on do-it-yourself projects in the same quarter. Home-improvement retailers typically benefit when people who are unable to buy new homes decide instead to renovate their current homes. But consumers had less appetite for big renovations in 2023 because higher interest rates raised the cost of borrowing.

Although the sharp increase in home values has given homeowners more equity on paper, getting access to it has become more expensive.

“With the housing market where it is, people are not able to move,” said Elliott, the CFRA Research analyst. “That is going to have an impact on demand.”

This story was originally published at nytimes.com. Read it here.