Location: Springfield, MA | Metro: Springfield, MA MSA
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 | $1,490 |
| 1 Bedroom | $1,670 |
| 2 Bedrooms | $2,120 |
| 3 Bedrooms | $2,640 |
| 4 Bedrooms | $2,790 |
| 5 Bedrooms | $3,236 |
| 6 Bedrooms | $3,624 |
| 7 Bedrooms | $3,914 |
| 8 Bedrooms | $4,110 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,120 | $290,073 | 0.73% | D |
| 3BR | $2,640 | $329,341 | 0.8% | C |
| 4BR | $2,790 | $349,963 | 0.8% | D |
U.S. Census Bureau data (2024)
The classification of ZIP 01118 (Springfield, MA) hinges on the interplay between its yield potential and stability metrics. The Federal Market Rent (FMR) for ZIP 01118 in fiscal year 2024 is set at $1,590, which is significantly higher than the market rent of $1,190. This disparity suggests a high-yield environment, as properties participating in the Section 8 program can command rents above the local market average. However, the median home value of $316,375 must be considered when evaluating the overall profitability, as it affects the initial investment cost.
On the stability front, ZIP 01118 presents a mixed picture. With only 19.9% of residents being renters, the market has a relatively low proportion of potential tenants, which could indicate less demand for rental units. Additionally, the median household income stands at $80,250, providing some insight into the economic conditions but lacking a direct measure of rental market health such as days on market (DOM). The absence of DOM data means we cannot fully assess the speed at which properties are leased, which is crucial for understanding cash flow consistency.
Given these factors, ZIP 01118 leans towards a high-yield market, driven by the favorable FMR compared to the local market rent. However, the lower percentage of renters and unknown DOM suggest that the stability is moderate at best, indicating a market that is not entirely reliable for steady cash flow. Landlords and small-portfolio investors should weigh the potential for higher returns against the risks associated with a less robust rental market. If they are willing to navigate the challenges posed by the limited demand for rentals, the financial benefits of participating in the Section 8 program could outweigh the uncertainties.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.