Location: Trenton-Princeton, NJ | Metro: Trenton-Princeton, NJ 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 | $1,570 |
| 1 Bedroom | $1,770 |
| 2 Bedrooms | $2,250 |
| 3 Bedrooms | $2,750 |
| 4 Bedrooms | $3,090 |
| 5 Bedrooms | $3,584 |
| 6 Bedrooms | $4,014 |
| 7 Bedrooms | $4,335 |
| 8 Bedrooms | $4,552 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,250 | $262,002 | 0.86% | C |
| 3BR | $2,750 | $342,870 | 0.8% | C |
| 4BR | $3,090 | $400,240 | 0.77% | D |
| 5BR | $3,584 | $431,987 | 0.83% | C |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 08638, Ewing, New Jersey, reveals a distinct gap between government-subsidized rental income and market rents. Using the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1870 annually by the HUD for fiscal year 2024, the implied gross yield for a property participating in the Section 8 program would be approximately 6.1%. This calculation is derived by taking the annual rental income ($1870) and dividing it by the median home value ($305,421).
In contrast, if a landlord were to rent out the same property at market rates, as indicated by the Zillow Observed Rental Index (ZORI) of $2,199 per month, the annualized rental income would amount to $26,388. This translates into an implied gross yield of about 8.6% when compared to the median home value.
The disparity between these yields underscores the financial reality faced by landlords in Ewing, NJ. Given that only 42.0% of the population are renters, the competition for tenants can be fierce, making market rents less guaranteed. The Section 8 program offers a stable, though lower, income stream. However, the lack of available data on days-on-market (DOM) suggests that there might be challenges in attracting tenants, whether through Section 8 or the open market.
The 8.6% gross yield based on market rents is more realistic for those who can secure market-rate tenants. For properties under the Section 8 program, the 6.1% gross yield reflects the trade-off between stability and reduced income. Investors must weigh these factors against their risk tolerance and investment goals.
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.