Location: Waco, TX | Metro: Waco, TX HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $910 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,030 | $105,001 | 0.98% | C |
| 2BR | $1,300 | $127,664 | 1.02% | B |
| 3BR | $1,700 | $231,969 | 0.73% | D |
| 4BR | $1,710 | $347,591 | 0.49% | F |
| 5BR | $1,984 | $413,231 | 0.48% | F |
U.S. Census Bureau data (2024)
The real estate market in Waco, TX (ZIP 76708) presents a nuanced landscape for landlords and small-portfolio investors. With a median home value of $224,188, the area remains relatively affordable compared to many other markets across the country. The recent trend of only 0.3% of listings reducing their prices suggests that sellers are maintaining firm pricing, indicating a resilient market where property values are holding steady. This is further supported by the 63-day median days on market (DOM), which reflects a moderate pace at which homes are selling. Sellers are not having to lower prices to attract buyers, implying a balanced market with some pricing power.
On the rental side, the Forward Monthly Rent (FMR) for ZIP 76708 is projected to be $1,270 for fiscal year 2024, while the actual market rent (ZORI) stands at $1,474. This gap signals that there is room for modest increases in rental rates without significantly impacting demand, as the market rate already exceeds the government's estimated fair market value. Landlords can leverage this to maintain or slightly increase rents, especially if they offer well-maintained properties in desirable areas.
For long-term investors, the setup in Waco implies a conservative appreciation thesis. The stable pricing power combined with the slight premium in market rents suggests that property values are likely to remain steady rather than experience rapid growth. This makes Waco an attractive location for those looking to build a portfolio based on consistent cash flow rather than speculative gains. Investors should focus on the quality of their properties and the efficiency of their management practices to ensure a reliable return on investment.
The market conditions also highlight the importance of understanding local trends and adapting strategies accordingly. While the overall environment supports maintaining current pricing and rental levels, investors must stay vigilant to any shifts in supply and demand that could affect these figures. Regularly reviewing property maintenance costs and rental market rates will help in making informed decisions about pricing and improvements.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.