Location: Pinehurst-Southern Pines, NC | Metro: Pinehurst-Southern Pines, NC 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 | $1,050 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,710 | $247,639 | 0.69% | D |
U.S. Census Bureau data (2024)
The analysis of ZIP code 27242 reveals a unique balance between yield potential and market stability, making it an interesting investment opportunity for landlords and small-portfolio investors.
To understand the yield potential, we must compare the Fair Market Rent (FMR) with the market rent and home values. The FMR for the metro area in fiscal year 2026 is set at $1,110, while the average market rent stands at $724. This indicates that there is a significant gap between what the market currently offers and the potential rental income supported by the FMR. For instance, if a property is rented at the market rate of $724 but can be increased to the FMR level of $1,110, the landlord would see a substantial increase in monthly rental income, enhancing the yield on investment.
The median home value in ZIP 27242 is $198,990. Given the disparity between the market rent and the FMR, properties in this area could potentially offer high yields, especially when considering the relatively low home values compared to the potential rental income.
Regarding market stability, 35.2% of residents are renters, indicating a moderate reliance on rental housing. However, the lack of data on days on market (DOM) and income levels limits our ability to fully assess the stability of the rental market. Without these key indicators, it's challenging to determine if the area has a high turnover rate or if tenants have stable incomes capable of supporting higher rents.
In conclusion, ZIP 27242 leans towards being a high-yield market due to the potential for increasing rental income to meet or exceed the FMR. However, the absence of certain stability metrics makes it difficult to categorize it definitively as either a steady-cashflow zone or a high-risk, high-reward flip-style market. Further investigation into the local economy and tenant income levels would provide a clearer picture of the overall stability.
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.