Waco, TX

ElevatedTier 1CBSA 47380Compare

Risk Rank: #28 of 287Month: 2025-12Score change (12m):↑ +19

62score

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

Executive Summary

Waco's housing market shows elevated risk, ranking 28th of 287 metros. The market has been in Hypersupply for 4 months. The market shows signs of liquidity stress with elevated inventory. Significant oversupply — conditions increasingly favor buyers over sellers.

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

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

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

Cycle Phase

RecoveryExpansionHypersupplyRecession

4 months in current phase·from Hypersupply

Building activity may be outpacing demand absorption

Key Dynamics

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

Top Drivers

Affordabilityp91

Mortgage payment / income

Permit Growthp90

YoY permit change

Employmentp66

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

-0.6%p56

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

Lower riskHigher risk

Low RiskBelow AvgNeutralElevatedHigh Risk

Price MomentumBelow Avg

+1.9%p32

12-month HPI change — higher = overheating

Permit GrowthHigh Risk

+40.2%p90

YoY permit change — higher = supply pressure

Permits per CapitaNeutral

4.82p57

Permits per 1,000 residents — higher = overbuilding risk

AffordabilityHigh Risk

0.34p91

Mortgage payment / income — higher = more burdened

EmploymentElevated

-0.1%p66

12-month employment change (risk inverted)

MigrationBelow Avg

+$30Kp39

Net AGI migration (risk inverted)

National Context

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

+191 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

0.92High

Completion-Permit Divergence

+1.9 ppNormal

Accumulating for 4 quartersData through 2026-Q1

Local Signals

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.

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.

Moderate12.7Limited 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 (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%	100	0	100
Bosque County	50	Average	6.2%	50	50	50
Falls CountyStabilizer	25	Low Risk	5.7%	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-Q4

Permits2026-01

Income2024

Employment2025-12

Migration2023