Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 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 | $2,000 |
| 1 Bedroom | $2,170 |
| 2 Bedrooms | $2,590 |
| 3 Bedrooms | $3,090 |
| 4 Bedrooms | $3,400 |
| 5 Bedrooms | $3,944 |
| 6 Bedrooms | $4,417 |
| 7 Bedrooms | $4,770 |
| 8 Bedrooms | $5,009 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,590 | $250,601 | 1.03% | B |
| 3BR | $3,090 | $360,230 | 0.86% | C |
| 4BR | $3,400 | $388,000 | 0.88% | C |
| 5BR | $3,944 | $441,594 | 0.89% | C |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,370 for Willingboro Township, NJ (ZIP 08046), in fiscal year 2024 will sufficiently cover the mortgage on a home priced at $354,605. This concern arises from the gap between the FMR and the potential mortgage payment. However, it's important to note that FMR is designed to reflect the average rent for a modest home in the area, not necessarily the highest possible rent. In practice, landlords can often charge more than the FMR if the property is well-maintained and located in a desirable neighborhood.
The next objection could be about the renter demand in the area, which stands at 15.8%. A low percentage might suggest that finding tenants could be challenging. Yet, this figure must be considered alongside the broader rental market dynamics. While 15.8% might seem low, it still represents a significant portion of the housing stock. Additionally, the rental vacancy rate is another key indicator that helps gauge the ease of finding tenants. If the vacancy rate is high, it could indicate an oversupply of rental units, but if it's low, it suggests strong tenant demand despite the percentage.
A final concern might be whether Housing Choice Vouchers will keep pace with the market rents, which currently stand at $2,817. The voucher amount is typically lower than the market rent, so landlords would need to consider the difference they'd have to absorb. According to the data, the average voucher payment in the area is less than the FMR, meaning landlords accepting vouchers may need to subsidize the remaining rent. This could be a financial burden, especially when market rents are significantly higher than the FMR. It's crucial for landlords to evaluate their individual circumstances and decide if the potential long-term stability offered by voucher tenants outweighs the short-term financial strain.
While these points highlight some challenges, they also underscore the importance of understanding the local real estate context. Investors should conduct thorough research, including speaking with local realtors and reviewing recent rental trends, to make informed decisions. The data provided gives a snapshot of the rental market conditions, but it does not fully capture the nuances of individual properties or the specific needs of potential tenants.
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.