The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the Waco housing market content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
The Data-Driven Case
Regardless of whether your financial institution sits in the Greater Waco area, this gem deep in the Heart of Texas presents a tremendous opportunity to write mortgage loans in one of the most affordable home-buying markets in the U.S. Let’s take a look at the data and explore the possibilities in and around Waco, TX.
Waco’s residential real estate market remains robust, creating strong lending opportunities for financial institutions. As housing affordability remains a nationwide concern, this city stands out as one of the best places for homebuyers and mortgage lenders alike to invest. A combination of lower mortgage costs relative to home price, a rapidly growing housing market, and high rental demand makes Waco a prime location for homeownership and real estate investment.
Mortgage Costs in Waco: A Competitive Edge
The affordability of Waco’s mortgage market is a key driver of its appeal. At the time this data was compiled in late June 2025, the typical monthly mortgage payment based on the median sold home price for the area fell between roughly $165-$257 less than the average rental cost, highlighting homeownership’s clear financial advantage. Compared to many metro areas where rent outpaces mortgage costs, Waco offers a compelling case for those looking to build equity instead of paying a landlord.
This trend aligns with broader data on U.S. markets where mortgage payments are lower than rent, as highlighted by Zillow Home Loans. Cities with this dynamic tend to attract both homebuyers and investors looking for profitable rental properties.
“Its strategic location between Dallas-Fort Worth and Austin has kept home values and demand for rental properties on the boil.” — Ciprian Morariu, Co-Founder, RealEstateU®
Strong Market Growth and Housing Affordability
Beyond lower average mortgage costs, Waco’s housing market has experienced significant growth. Home sales increased by 73.8% from November 2023 to May 2025, indicating steady demand. Meanwhile, housing inventory surged by 535% from May 2021 to May 2025, providing more opportunities for buyers to find suitable homes.
Affordability remains a crucial factor in Waco’s housing market. The city’s housing costs are 23% below the national average, making it one of the most cost-effective places to purchase a home. Moreover, Waco ranks as the 8th cheapest small city for homebuyers in the U.S., reinforcing its position as a prime market for affordable homeownership.
Waco’s Rental Market and Investment Appeal
While homeownership is on the rise, Waco has also ranked #15 among the top cities to buy a rental property. Investors seeking strong rental income potential will find the market favorable due to increasing housing demand and a stable local economy. With mortgage payments notably lower than rent, landlords can benefit from positive cash flow while tenants continue to fuel demand for rental properties.
The Bottom Line for Mortgage Lenders
For mortgage lenders and financial institutions, Waco presents a market ripe with opportunity. The affordability advantage, strong housing demand, and rental market strength make it an attractive city for mortgage origination. Whether serving first-time homebuyers, move-up buyers, or real estate investors, lenders can expect consistent activity in Waco’s growing market.
As home affordability challenges persist nationwide, Waco’s housing market stands as a beacon of opportunity. For financial institutions looking to expand their mortgage lending footprint, this Texas city offers a solid foundation for sustainable growth and success.
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