Location: Waterbury-Shelton, CT | Metro: New Haven, CT 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 | $1,260 |
| 1 Bedroom | $1,440 |
| 2 Bedrooms | $1,780 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,780 | $291,824 | 0.61% | D |
| 3BR | $2,200 | $376,107 | 0.58% | F |
| 4BR | $2,620 | $433,996 | 0.6% | D |
| 5BR | $3,039 | $490,547 | 0.62% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 06418, Derby, CT, reveals a challenging but manageable environment. The HUD Fair Market Rent (FMR) for the area in fiscal year 2024 is set at $1,530. In contrast, the Zillow Observed Rent Index (ZORI) for the same period stands at $1,983, indicating that market rents are significantly higher than the FMR. This means that voucher tenants will only cashflow at the FMR level in premium units, where the rent is closer to the FMR figure.
To derive the rent-to-price ratio, we use the median home value of $336,610. Dividing the market rent of $1,983 by the median home value yields a ratio of approximately 0.59%. This suggests that rental income is relatively low compared to the cost of homeownership, which could indicate that the buy-versus-rent dynamics favor renting over owning in this market. However, given the limited data on days on market (DOM) and the percentage of homes that have been price-cut, it's difficult to make a definitive statement on the volatility of the housing market.
The strongest angle for investors in ZIP 06418 remains stability. While cashflow might be tighter due to the discrepancy between market rents and the HUD FMR, the relative consistency in property values and the demand for affordable housing can provide a steady, long-term investment opportunity. Appreciation potential is less clear without additional data on historical trends and future projections, but stability offers a reliable base for any real estate portfolio.
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.