On price, Waco's market looks almost unchanged from last year. Several Waco-area builders are now competing on the monthly payment instead. They are paying down buyers' interest rates through their own lenders, and a buydown tied to a specific sale generally counts against the same federal concession limits that apply to any resale seller. For anyone comparing a new build with an existing home this fall, the list prices are only part of the story. The full comparison includes the rate, how long that rate lasts, and who is paying for it.
A market that held still on price
The most recent month available is August 2026. The Texas A&M Texas Real Estate Research Center puts the Waco metro median at $285,237 that month, on 277 sales, with 1,452 active listings and 5.57 months of inventory. The center publishes metro figures about 20 days after a month ends, so September numbers should come out around Oct. 20.
The Waco Tribune-Herald reported Waco Association of Realtors figures for inside the city limits. In August 2026 the city had 128 closed sales at a median of $275,000, up 3.8% from a year earlier. Homes averaged 65 days on market and another 32 days to close, for 97 days in total. That was six days longer than in August 2025. In the same article, a local MLS-based report showed August homes across McLennan County selling for an average of 97.3% of list price, close to the 97% recorded a year earlier.
Sale prices are holding close to list price, and inventory is in the 4-to-6-month range that one agent quoted in the Tribune-Herald piece called balanced. Builders, though, have something to sell besides price, and this fall they are selling the rate.
What the builders are actually offering
These are the current offers on builder websites as of early October 2026. All of them are time-limited.
| Builder | Where in the Waco area | Rate offer | Other incentive | Deadline |
|---|---|---|---|---|
| Stylecraft | Liberty Oaks; Adaline Crossing in McGregor; South Fork | 4.49% on a 5/1 ARM, paid by the builder | Or up to $20,000; one McGregor home cut from $347,900 to $312,900 | Loans closed by Nov. 30, 2026 |
| D.R. Horton | Eagles Landing in the China Spring area; Park Meadows in Lorena | 4.99% fixed FHA and VA on certain homes | Price reductions on specific inventory homes | Contract on or after Sept. 19, close by Dec. 31, 2026 |
| John Houston Homes | Lake Forest in Woodway; Sunwest Village; Bull Hide Estates in Hewitt; Callan Village in Lorena; Chapel Ridge | 5.75% fixed on qualifying move-in-ready homes | Or "family pricing"; on new builds, up to $10,000 toward closing costs and up to $50,000 toward the design center | Agreements by Oct. 31, 2026 |
The price cuts on specific homes are just as useful. On John Houston Homes' October flyer, 92 Cedar Creek Court in Lake Forest is listed at $499,076 instead of $549,990, and 509 Geyser Trail in Sunwest Village at $371,561 instead of $419,990. In Lorena, D.R. Horton lists 11805 Ceres Street in Park Meadows at $306,910, down from $312,410. At Eagles Landing, 10113 Neptune Court is listed at $258,715, down from $267,215.
The builders pick specific homes, attach deadlines, and in John Houston Homes' case make buyers choose between the lower rate and the lower price, because the two offers cannot be combined. Holding the line on list price while subsidizing the loan helps explain how August sale prices stayed so close to last year's.
The captive-lender condition
Each rate offer comes with a lender condition. Stylecraft's 4.49% requires financing through Kangaroo Home Lending. The fine print says buyers can use any lender to buy the home, but must use Kangaroo to qualify for builder incentives. D.R. Horton's 4.99% requires DHI Mortgage financing. John Houston Homes' closing-cost credit can go toward eligible discount points and rate buydowns, subject to loan-program limits.
So two quotes can carry the same advertised rate and still be different products. A buyer comparing a new build with a resale home is often comparing a builder-chosen lender and loan program against whatever lender they would have used anyway. For a buyer who already has a pre-approval in hand, that is real friction.
What happens in year six
Of the three rate offers, only one is an adjustable loan, and the fine print explains how it works. Stylecraft's 4.49% is the starting rate on a 5/1 ARM with a 30-year amortization, fixed for five years. From year six, the rate can change once a year. Each change is limited to 1%, total increases over the life of the loan are capped at 5%, and the rate can never fall below the loan's margin.
The builder's own example uses a $320,208 purchase price with an FHA loan and 3.5% down. That gives a $314,417 loan and an initial payment of $1,591, before taxes, insurance, and mortgage insurance. The disclosed APR on that example is 6.879%, calculated on the assumption that the rate rises by the maximum allowed each year.
Two figures matter for a fair comparison:
- The starting payment. It covers the first five years only.
- The APR. It reflects the loan over its full term under the disclosed adjustment rules.
D.R. Horton's 4.99% and John Houston Homes' 5.75% are both fixed rates. John Houston Homes shows APRs of 5.891% conventional, 6.603% FHA, and 6.177% VA on its offer. Because the lowest advertised rate this fall is also the only adjustable one, ranking the offers by headline rate alone gives a misleading order.
Mostly the same rulebook
Here is how the resale side works. A builder paying down a buyer's rate on a specific sale is an interested party making a contribution, and the federal loan programs cap those contributions whether the seller is a national builder or a homeowner on a quiet Waco street. Fannie Mae makes one exception. A blanket rate commitment that a builder arranges with a lender before any buyer signs a contract is not subject to its concession caps, because it is not tied to a single loan. The builders' published terms don't say whether any of this fall's offers are set up that way. Stylecraft's own terms say its promotion cannot exceed seller concession limits and that total interested-party contributions are limited.
The caps work like this:
- Conventional loans. The Fannie Mae Selling Guide allows interested-party contributions of 3% of value when the loan-to-value ratio is above 90%, 6% between 75.01% and 90%, and 9% at 75% or below on a principal residence or second home. Investment property is capped at 2%. "Value" means the lower of the sale price or the appraised value. Temporary and permanent buydowns both count toward the cap.
- FHA loans. HUD's FHA guidance allows up to 6% of the sales price toward eligible closing costs, prepaids, and discount points, including rate buydowns. Contributions above that are treated as inducements to purchase.
- VA loans. The VA limits seller concessions to 4% of the home's reasonable value, lists loan-closing-cost credits without a stated percentage cap, and names discount points as a negotiable closing cost.
Apply that to the August city median of $275,000. On an FHA sale at that price, the 6% ceiling works out to $16,500. On a conventional loan with less than 10% down, the 3% ceiling is $8,250. A resale seller who offers a credit the buyer's lender can put toward discount points is using the same tool a builder uses on a single sale, under the same caps. The difference is that the buyer keeps their own choice of lender.
Where price tier changes the math
A local MLS-based report quoted in the Waco Tribune-Herald put it plainly: "there isn't one Waco housing market, there are several markets operating at the same time." Builder incentives fall unevenly across those markets.
The $200,000 to $299,999 range made up 35.7% of August closings inside Waco city limits. That is where entry-level new construction competes directly. Stylecraft's South Fork floor plan starts at $275,900, almost exactly the city median. D.R. Horton's Neptune Court home sits below it. A resale home in this band is up against payment-subsidized new homes, and a seller credit capped at a few percent of a smaller price buys less rate reduction in dollars.
Higher up, the comparison shifts. Stylecraft's move-in-ready homes at Liberty Oaks are listed at $353,900 to $384,900. The John Houston Homes reductions in Lake Forest and Sunwest Village run close to $50,000 each. In that tier a builder is often competing with straight price reductions, so a resale home's lot, location, or established surroundings become more of the comparison.
The same Tribune-Herald report described buyers as having more choices and taking more time to decide. With 97 days from listing to closing in August, resale sellers have room to consider how a concession is structured, not only how big it is.
Questions that come up
Is a builder's buydown worth more than a resale seller's credit of the same size? When the buydown is tied to that specific sale, the caps generally treat the two the same. Fannie Mae exempts blanket builder-lender rate commitments made before the contract. The other differences are the lender condition, whether the loan is fixed or adjustable, and whether the offer rules out other incentives.
Do these offers last past fall? Every offer here carries a date. The John Houston Homes promotions run through Oct. 31, Stylecraft's loans must close by Nov. 30, and D.R. Horton's rate offer requires closing by Dec. 31, 2026. All of them are subject to change.
When will September numbers show whether this is moving prices? The Texas Real Estate Research Center releases metro data about 20 days after each month ends, so September figures for Waco should appear around Oct. 20.
This post is general information about how these loan programs and builder offers work, not legal, tax, or financial advice. Please confirm the details for your own loan and purchase with your lender and other qualified professionals.
If you are weighing a new build against a resale home in Waco this fall, or pricing a home that will sit beside builder inventory, I'm glad to put the payments, the loan terms, and the concession math side by side with you. Vianey Suarez works with buyers and sellers across Waco, Lorena, and the surrounding communities, in English and Spanish. Let's Connect.
