Location: Pittsburgh, PA | Metro: Pittsburgh, PA 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 | $1,390 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,790 |
| 3 Bedrooms | $2,280 |
| 4 Bedrooms | $2,480 |
| 5 Bedrooms | $2,877 |
| 6 Bedrooms | $3,222 |
| 7 Bedrooms | $3,480 |
| 8 Bedrooms | $3,654 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,480 | $229,961 | 0.64% | D |
| 2BR | $1,790 | $200,790 | 0.89% | C |
| 3BR | $2,280 | $252,311 | 0.9% | C |
| 4BR | $2,480 | $444,332 | 0.56% | F |
| 5BR | $2,877 | $593,173 | 0.49% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 15206 in Pittsburgh, PA, provides valuable insights for landlords and small-portfolio investors. To begin, let's consider the annualized Fair Market Rent (FMR) for a two-bedroom property, which stands at $1450 per month for fiscal year 2024. This translates to an annual rental income of $17,400 when participating in the Section 8 program.
In contrast, the market rent for a similar two-bedroom property, as indicated by Zillow's ZORI index, is $1,645 per month. The annual market rent, therefore, amounts to $19,740. Using these figures, we can calculate the gross yields based on the median home value of $284,321.
The implied gross yield for the Section 8 scenario is approximately 6.12%. This is derived by dividing the annual Section 8 rental income ($17,400) by the median home value ($284,321). For the market rent scenario, the gross yield increases to about 6.95%, calculated by dividing the annual market rent ($19,740) by the same median home value.
Given that 59.1% of residents in ZIP 15206 are renters, there is a substantial demand for rental properties. However, the N/A-day Days on Market (DOM) suggests that either listings are quickly leased or there is limited turnover data available. This implies that landlords should expect steady occupancy rates but must also be prepared for potential challenges in securing higher rents outside of the Section 8 program.
While the market rent scenario offers a slightly better gross yield, the Section 8 program ensures a stable income stream backed by government subsidies. Landlords should weigh the benefits of guaranteed tenants and consistent cash flow against the potential for higher returns through market rent. The choice between these options largely depends on individual investment goals and risk tolerance.
To summarize, the gross yields for ZIP 15206 are 6.12% under the Section 8 program and 6.95% for market rent. Given the high renter density, both scenarios present viable opportunities. However, the lack of specific DOM data makes it difficult to predict how quickly a property might turn over if rented at market rates versus through the Section 8 program.
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.