Location: Newark, NJ | Metro: Newark, NJ 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 | $2,180 |
| 1 Bedroom | $2,470 |
| 2 Bedrooms | $2,980 |
| 3 Bedrooms | $3,730 |
| 4 Bedrooms | $4,240 |
| 5 Bedrooms | $4,918 |
| 6 Bedrooms | $5,508 |
| 7 Bedrooms | $5,949 |
| 8 Bedrooms | $6,246 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,980 | $581,562 | 0.51% | F |
| 3BR | $3,730 | $794,564 | 0.47% | F |
| 4BR | $4,240 | $1,203,395 | 0.35% | F |
| 5BR | $4,918 | $1,618,803 | 0.3% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 07945, which includes Mendham, NJ, and is part of the Newark, NJ HUD Metro FMR Area, reveals several key insights. The HUD Fair Market Rent (FMR) for FY 2024 is set at $2360 per month, while the Census ACS indicates an average market rent of $3,501 per month. This means that landlords accepting Section 8 vouchers will experience negative cash flow on standard units, as the FMR does not cover the market rent. To achieve positive cash flow, landlords must focus on premium units where the rental income can be higher than the FMR, or they should consider areas with lower market rents.
The median home value in this area is $1,089,271. To understand the rent-to-price ratio, we calculate it by dividing the annual market rent ($42,012) by the median home value. This gives us a ratio of approximately 3.86%, suggesting that renting out homes in this area is less profitable compared to owning them outright. However, this does not necessarily mean that investing in rental properties is unwise, as the stability of Section 8 tenants can provide consistent income.
The data shows that the median days on market (DOM) is not applicable (N/A), and the share of listings that required a price cut is only 0.1%. These figures indicate that the housing market in ZIP 07945 is stable, with few properties requiring adjustments to their asking price. This stability is beneficial for both landlords and small-portfolio investors, as it suggests that property values are unlikely to fluctuate significantly over time.
The strongest angle for investors in this market is stability. Given the high median home value and the relatively stable housing market, investors can expect consistent performance from their properties, even if cash flow is initially negative. Over the long term, the stability of the market and the reliability of Section 8 tenants can outweigh the initial financial shortfall.
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.