What happened

Shares of real estate outfit Redfin (RDFN -3.22%) are falling once again after the brief respite investors got last week when it announced it was killing its instant home purchase iBuying program

Although its earnings report last week missed analyst expectations, news of the end of the instant home buying program and word of widespread layoffs boosted shares of Redfin since it recognized the sharp downturn real estate was experiencing.

Smiling family outside a home for sale.

Image source: Getty Images.

So what

Redfin was something of a holdout in continuing its iBuying program after Zillow shut down its similarly situated service last year. But with housing now clearly in the teeth of a bear market, continuing to buy houses that it's going to have difficulty selling at a profit -- or at all -- just doesn't make sense.

Mortgage rates are soaring, new home sales are tumbling, and although housing prices are falling, finding willing buyers at this juncture won't be easy.

That's why Redfin also announced it was firing 13% of its workforce, or some 860 employees. And with the Federal Reserve determined to continue raising interest rates until it can get inflation under control, the real estate market is going to be dead for an extended period.

Now what

Live by the sword, die by the sword. The housing boom that began over a decade ago was brought on by the easy money policies of the Fed, which kept interest rates at or near zero for far longer than was prudent. Now quantitative easing is turning into quantitative tightening, and the ripple effects on the housing industry will be just as profound. Redfin could well end up being the collateral damage of these decisions.