The average price of property coming to the UK market dropped in August for the first time this year as the market returns towards "normal seasonal patterns after a frenzied two years", Rightmove (RMV.L) said.
UK house prices fell by 1.3%, or £4,795 this month to £365,173.
However, the property portal said traditionally prices fall in August, and this drop is on a par with the average over the last 10 years.
Rightmove added summer holidays are "taking priority", with some new sellers pricing more competitively in a rush to secure a buyer quickly, beat the lengthy completion times, and move home before Christmas.
While the drop reflects seasonal trends in the housing market, the Bank of England's sixth consecutive interest rate hike is likely to weigh on many would-be home-movers.
Last week's interest rate rise of 50 basis points to 1.75% is also putting further pressure on buyer affordability, according to Rightmove.
The average monthly mortgage payments for new first-time buyers putting down a 10% deposit exceeded £1,000 for the first time to reach £1,032 — 27% higher than at the start of the year.
That, coupled with the rising cost of living, will lead to re-considerations of what movers can afford to borrow and repay each month, Tim Bannister director of property science at Rightmove, said.
"It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move," Bannister added.
Demand has continued to soften and supply constraints are improving, according to Rightmove's house price index, but there is an imbalance as buyer enquiries to agents fell 4% on 2021, although still up 20% on 2019.
New listings rose by 12% on the same period last year, and down 6% on 2019, while available stock is declined 39% on 2019.
In the last two years, house prices have boomed as demand for more space rose during COVID lockdowns.
Bannister added: "A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays.
"Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years.
"Right now, the mismatch between supply and demand is still the biggest factor influencing asking prices outside of seasonal trends.
"For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month."