Waco, TX

ElevatedTier 1CBSA 47380Compare

Risk Rank: #8 of 274Month: 2026-05Score change (12m):↑ +34

67score

Composite risk percentile vs 274 metros (higher = higher risk)

Executive Summary

Waco's housing market shows elevated risk, ranking 8th of 274 metros. The market recently entered Recovery. Current conditions are balanced with stable liquidity. Early signs of stabilization — conditions may favor patient buyers.

Waco experienced a market correction from mid-2025 through late 2025. The market is currently recovering.

Inventory is growing at a moderate +9% pace with homes taking +97% longer to sell — within normal ranges.

Rent growth is roughly keeping pace with price appreciation, suggesting valuations are not stretched.

Cycle Phase

RecoveryExpansionHypersupplyRecession

1 month in current phase

Market conditions are rebuilding after a correction period

Key Dynamics

Risk is primarily driven by permit growth and affordability, while employment provides the most support.

Top Drivers

Permit Growthp94

YoY permit change

Affordabilityp93

Mortgage payment / income

Price Momentump84

12-month HPI change

Market Signals

Inventory is growing at a moderate +9% pace with homes taking +97% longer to sell — within normal ranges.

Liquidity

Stable↓

Active Listings YoY

+8.7%p58

Days on Market YoY

+97.0%p99

Months in status1

Data through May 2026

Valuation

Balanced—

Rent vs. Price Growth

-2.0%p33

Months in status1

Data through May 2026Rent growth vs price growth (rent support). Note: Affordability and Valuation measure different structural dimensions and can diverge.

Factor Details

Lower riskHigher risk

Low RiskBelow AvgNeutralElevatedHigh Risk

Price MomentumHigh Risk

+3.0%p84

12-month HPI change — higher = overheating

Permit GrowthHigh Risk

+50.5%p94

YoY permit change — higher = supply pressure

Permits per CapitaElevated

5.93p70

Permits per 1,000 residents — higher = overbuilding risk

AffordabilityHigh Risk

0.36p93

Mortgage payment / income — higher = more burdened

EmploymentBelow Avg

+0.7%p23

12-month employment change (risk inverted)

MigrationBelow Avg

+$30Kp39

Net AGI migration (risk inverted)

National Context

Credit Conditions

Credit Regime

Stable—

Healthy recovery. Credit is flowing normally and transactions are steady — conditions favor continued rebuilding.

Bank Lending Standards

-3.7Normal

Rate Change (YoY)

-38 bpsNormal

Mortgage Risk Premium

+199 bpsElevated

Stable for 9 quartersData through 2026-Q2

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

0.90Elevated

Completion-Permit Divergence

-5.9 ppNormal

Accumulating for 5 quartersData through 2026-Q2

Local Signals

Metro Permit Activity

Permit Activity

Surge

YoY Permit Growth

+50.5%Far above norm

Raw signal — not the composite percentile

Relative to 2016–2019 norms for this metro

Permit activity is surging and demand is absorbing it. Both sides of the market are running hot — monitor for overheating if liquidity shifts.

Employment Concentration

Employment

Limited data

Largest SectorGovernment 31.3%

5 of 20 sectors disclosed · QCEW 2024 annual averages

Internal Structure

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

Moderate14.8Limited 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 permit growth), while Falls County anchors the lower end (Low Risk).

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

County	Score ▼	Band	Pop %	Price	Permits	Afford
McLennan CountyRisk Driver	75	Elevated	88.1%	0	100	100
Bosque County	62	Elevated	6.2%	100	50	50
Falls CountyStabilizer	12	Low Risk	5.7%	50	0	0

Score History

Month	Phase	Score	Price	Permits	Afford	Employ	Migr
2025-12	Hyp	62	32	90	91	66	39
2025-10	Hyp	50	61	5	92	57	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)2026-Q1

Permits2026-05

Income2024

Employment2026-05

Migration2023