After a roughly two-year party during the pandemic, North Texas’ housing market has begun to wind down.

In spring 2022, elevated home prices and rising mortgage rates started to weigh on prospective buyers. In 2022 alone, mortgage rates nationally more than doubled, climbing from under 3% to well over 7%. As of December 28, the average rate for a 30-year fixed loan stood at 6.64% in Texas.

While the North Texas market remains relatively robust, median home value and demand have both dropped.

As a whole, North Texas has seen median sales prices fall nearly 9% since peaking at $435,000 this past summer. Looking back further, however, prices persist well above the median level of $283,000 seen less than three years ago.

In November 2022, the median home price in Dallas in particular stood at $439,900, down from a high of $526,250 in June, an over 16% drop in only five months. Still, prices in the city are still up over 10% year-over-year.

Fort Worth has also experienced a pullback from a peak of $368,900 in August to a more modest $355,000 in November. Like Dallas, however, Fort Worth prices are still higher than one year ago, up 7.6% annually.

According to A&M economist Jim Gaines, while existing home sales are sliding, he hesitates to say the market is trending toward a crash. Instead, he thinks DFW inventory is more likely reverting to the pre-pandemic levels and sales numbers.

“There’s no doubt about it, the market is slowing down from a very high peak,” according to Gaines.

With demand slowing, homebuilders are reducing their purchases of new land. Construction has also slowed in the metroplex, with builders facing a sizable number of unsold homes.

According to the market research firm Residential Strategies, based in Dallas, the metroplex experienced its largest annual decline in home starts in nearly 10 years during the third quarter of 2022.

Despite the headwinds, Residential Strategies principal Ted Wilson believes numerous factors will keep the market in DFW “buoyed so that it doesn’t crash,” The Dallas Morning News reported.

Sellers are feeling the slowdown. In November in DFW, homes remained on the market for an average of 69 days, up from 58 one month prior. Home listings have also risen, up 130% in November compared to one year earlier.

According to Tiffany Todd, a real estate agent with TD Realty in Mansfield, we are entering a “different market.”

As a result, it is critical to “educate buyers and sellers of what is going on and just make sure that we’re on the same page, that no one is working against them,” Todd told The Dallas Morning News.

While North Texas may escape a market crash, other regions of the country may not be so lucky.

Some markets, according to Taylor Marr, deputy chief economist for Redfin, have seen sharp declines in demand after transplants from places like California aggressively drove up home prices during the pandemic.

“Dallas has definitely been hit, but it is still a relatively affordable place,” said Marr.