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 | $840 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,080 | $161,079 | 0.67% | D |
| 3BR | $1,380 | $220,754 | 0.63% | D |
| 4BR | $1,500 | $272,603 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 15666, Mount Pleasant, PA, reveals some interesting insights. To start, the Fair Market Rent (FMR) for a 2-bedroom apartment in this area for FY 2024 is set at $940 annually. Given the median home value in the area is $174,261, this translates into an implied gross yield of approximately 5.39% when using the FMR figure. This calculation is derived by dividing the annualized rent ($940) by the median home value ($174,261).
On the other hand, the market rent for a 2-bedroom property, based on Census ACS data, is $799 annually. Using this market rent figure, the implied gross yield drops to about 4.59%. The calculation here is similar: the annual market rent ($799) divided by the median home value ($174,261).
The difference between these two yields highlights the varying profitability of properties under Section 8 versus the broader rental market. At first glance, the higher yield from the FMR scenario appears more attractive. However, it's important to consider the local context, specifically the renter density and days on market (DOM).
The renter density in Mount Pleasant, PA, is 22.9%, indicating that a significant portion of residents are homeowners rather than renters. This suggests that the demand for rental properties, including those under Section 8, might be lower compared to areas with higher renter populations.
The N/A-day DOM figure implies that there isn't enough data to provide an accurate measure of how long rental properties remain on the market before being leased. This lack of information could mean either a very efficient leasing process or a scarcity of rental listings, making it difficult to predict the market's true dynamics.
Given these factors, the market rent scenario, with its slightly lower gross yield of 4.59%, may be more reflective of the actual rental environment in Mount Pleasant. Landlords and small-portfolio investors should be cautious about relying solely on the higher FMR yield without considering the local rental market conditions and the potential challenges in maintaining occupancy rates.
In conclusion, while the Section 8 program offers a guaranteed income stream at a rate that provides a 5.39% gross yield, the reality of the local rental market, characterized by a low renter density and uncertain leasing trends, suggests that the 4.59% gross yield based on market rents is a more prudent estimate for investment purposes.
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.