Location: Hickory-Lenoir-Morganton, NC | Metro: Hickory-Lenoir-Morganton, 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 | $850 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,510 |
| 5 Bedrooms | $1,752 |
| 6 Bedrooms | $1,962 |
| 7 Bedrooms | $2,119 |
| 8 Bedrooms | $2,225 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $161,866 | 0.62% | D |
| 3BR | $1,240 | $273,433 | 0.45% | F |
| 4BR | $1,510 | $343,310 | 0.44% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Sawmills, NC (ZIP 28638), might question whether the Fair Market Rent (FMR) of $870 for the fiscal year 2024 can sufficiently cover the mortgage on a home valued at $251,543. To address this, we must consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $251,543 home would be approximately $1,334. This amount exceeds the FMR by $464, indicating that FMR alone will not cover the mortgage.
The second objection is the relatively low percentage of renters at 22.9%. This figure suggests that only a quarter of the population is likely to be interested in renting properties. However, this does not necessarily mean there isn't sufficient demand. The median household income in Sawmills, NC, is around $41,000, which implies that a significant portion of residents could benefit from affordable housing options supported by Section 8. Moreover, the local unemployment rate is under 4%, suggesting a stable job market that supports rental demand.
The third concern is whether voucher amounts will keep pace with market rents, which stand at $711. While the FMR of $870 is higher than the current market rent, it's important to note that voucher holders often face restrictions on where they can use their vouchers. The gap between the FMR and market rent indicates that voucher holders could potentially afford to pay the difference, but this depends on individual circumstances. In Sawmills, NC, landlords should ensure they understand the local rental market dynamics and the willingness of voucher recipients to pay additional rent.
In summary, while the FMR of $870 is insufficient to cover the mortgage on a $251,543 home, the local economic conditions suggest a stable rental market. The percentage of renters at 22.9% is lower than some other areas, but the combination of low market rents and the potential for supplemental payments means that Section 8 can still be a viable option for landlords in Sawmills, NC. However, it's crucial to monitor local trends and adjust expectations accordingly.
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.