Waco, TX

ElevatedTier 1CBSA 47380Compare

Risk Rank: #12 of 287Month: 2025-12Score change (12m):↑ +24

67score

Composite risk percentile vs 287 metros (higher = higher risk)

Cycle Phase

Waco experienced a market correction from mid-2025 through late 2025. Elevated inventory persists, suggesting the market hasn't fully normalized.

Recovery

Expansion

Hypersupply

Recession

In Hypersupply for 4 months·Previously: Hypersupply

Building activity may be outpacing demand absorption

Recovery

Expansion

Hypersupply

Recession

Waco's housing market shows elevated risk, ranking 12th of 287 metros. The market has been in Hypersupply for 4 months. The market shows signs of liquidity stress with elevated inventory.

Executive Summary

Risk is Elevated, driven primarily by affordability and permit growth. The market is in Hypersupply phase. Liquidity is stress and valuation is balanced.

Top Risk Drivers (This Month)

Affordability

p93 (highest risk decile)

Mortgage payment / income

Permit Growth

p91 (highest risk decile)

YoY permit change

Employment

p66 (moderate)

12-month employment change (risk inverted)

Market Signals

Inventory has surged +27% YoY with days on market up +33% — significant supply buildup indicating market stress.

Liquidity

Stress↓

Active Listings YoY

+27.5%p77

Days on Market YoY

+33.3%p90

Months in status7

Data through Dec 2025

Valuation

Balanced—

Rent vs. Price Growth

-1.8%p37

Months in status11

Data through Dec 2025Rent growth vs price growth (rent support). Note: Affordability and Valuation measure different structural dimensions and can diverge.

Factor Details

Factor Breakdown

Price Momentum56

12-month HPI change — higher = overheating

Permit Growth91

YoY permit change — higher = supply pressure

Permits per Capita58

Permits per 1,000 residents — higher = overbuilding risk

Affordability93

Mortgage payment / income — higher = more burdened

Employment66

12-month employment change (risk inverted)

Migration38

Net AGI migration (risk inverted)

Underlying Values

Metric	Value	Pctile
Price Momentum	+2.9%	p56
Permit Growth	+40.2%	p91
Permits/1K Pop	4.82	p58
Affordability	0.35	p93
Employment	-0.1%	p66
Net AGI Migration	+$43K	p38

National ContextDoes not affect score

Credit Conditions

Credit Regime

Stable—

Oversupply with deteriorating transactions and no credit excuse. Supply-driven correction risk is elevated.

Bank Lending Standards

-5.7Normal

Rate Change (YoY)

-74 bpsNormal

Mortgage Risk Premium

+189 bpsElevated

Stable for 8 quartersData through 2026-Q1

Supply Pipeline

Supply Regime

Accumulating—

Supply pipeline is building up while credit remains available. New units are accumulating in the system — watch for delivery pressure in coming quarters.

Pipeline Ratio

0.91High

Completion-Permit Divergence

-3.2 ppNormal

Accumulating for 3 quartersData through 2025-Q4

Local SignalsDoes not affect score

Metro Permit Activity

Permit Activity

Surge

YoY Permit Growth

+40.2%Far above norm

Raw signal — not the composite percentile

Relative to 2016–2019 norms for this metro

Significant overbuilding into weak demand. This is the highest-risk metro combination — new supply is delivering into a market that is already struggling to absorb existing inventory.

Liquidity

Stress↓

Active Listings YoY+27.5%

Days on Market YoY+33.3%

AssessmentSignificant supply buildup

Stress for 7 monthsData through Dec 2025

Internal Structure

Waco's 3 counties show moderate divergence — McLennan County carries the most risk (Elevated) while Falls County anchors the lower end.

Moderate13.9Limited data

3 of 3 counties scored

Waco, TX shows Moderate internal divergence — some counties diverge meaningfully from the metro picture. McLennan County contributes the most structural risk (Elevated, driven by price momentum), while Falls County anchors the lower end (Below Average).

Within-metro factor percentiles (0 = lowest risk, 100 = highest risk)

County	Score ▼	Band	Pop %	Price	Permits	Afford
McLennan CountyRisk Driver	67	Elevated	33.3%	100	0	100
Bosque County	50	Average	33.3%	50	50	50
Falls CountyStabilizer	33	Below Average	33.3%	0	100	0

Score History

Month	Phase	Score	Price	Permits	Afford	Employ	Migr
2025-11	Hyp	48	58	5	92	51	38
2025-09	Hyp	47	49	5	92	53	38
2025-08	Ress	40	34	5	92	29	38
2025-06	Ress	32	4	5	89	12	38
2025-05	Hyp	33	5	5	89	15	38
2025-04	Ress	32	9	5	89	10	38
2025-02	Ress	44	62	5	91	22	38
2025-01	Rec	45	76	5	91	16	38
2024-12	Hyp	43	52	5	90	30	38
2024-10	Hyp	39	12	5	90	47	38
2024-07	Ress	43	15	5	91	67	38
2024-05	Ress	36	10	5	91	30	38
2024-04	Hyp	36	11	5	91	26	38
2024-02	Hyp	33	0	5	88	22	38
2023-11	Hyp	36	6	5	92	31	38
2023-08	Hyp	40	30	5	94	27	38
2023-05	Hyp	45	50	5	93	38	38
2023-03	Ress	52	80	5	93	54	38
2023-01	Ress	54	71	5	93	72	38
2022-10	Ress	55	86	5	92	64	38
2022-07	Hyp	51	84	5	91	42	38
2022-06	Ress	50	79	5	90	40	38
2022-04	Ress	52	80	5	90	52	38
2022-03	Exp	48	86	5	89	28	38
2022-01	Exp	51	85	5	89	42	38
2021-10	Exp	46	76	5	86	26	36
2021-07	Exp	52	60	5	84	86	36
2021-05	Rec	55	66	5	84	97	36
2021-03	Rec	40	49	5	84	22	36
2020-12	Rec	39	53	5	96	7	31
2020-09	Rec	44	82	5	97	7	31
2020-06	Rec	41	63	5	97	7	31
2020-05	Exp	43	77	5	97	2	31
2020-03	Exp	49	92	5	97	24	31
2019-12	Rec	54	84	5	97	58	37
2019-10	Rec	54	84	5	97	54	37
2019-07	Rec	46	69	5	97	26	37
2019-04	Exp	45	56	5	96	33	37
2019-02	Exp	40	41	5	96	18	37
2019-01	Hyp	39	34	5	96	20	37

Data Vintages

Price (HPI)2025-Q3

Permits2025-12

Income2024

Employment2025-12

Migration2022