Location: Holmes County, FL | Metro: Walton County, FL 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 | $960 |
| 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: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,230 | $175,963 | 0.7% | D |
| 3BR | $1,710 | $249,124 | 0.69% | D |
U.S. Census Bureau data (2024)
In Defuniak Springs, FL (ZIP 32455), the real estate market presents a nuanced scenario for landlords and small-portfolio investors. The median home value stands at $215,409, indicating a stable housing base. With only 0.2% of listings seeing reductions in price, it's evident that sellers maintain strong pricing power. This low percentage of price reductions suggests that demand remains steady relative to supply, supporting the notion that home values are unlikely to decline significantly in the coming 12-24 months.
The median days on market (DOM) being listed as N/A could imply either an exceptionally quick market turnover or an insufficient number of transactions to establish a reliable average. In either case, this aligns with the observation of minimal price reductions, reinforcing the idea that homes are selling swiftly when listed at their asking price. This swift turnover rate is indicative of a robust local economy and strong buyer interest, which bodes well for maintaining current property values.
On the rental side, the Fair Market Rent (FMR) for ZIP 32455 in fiscal year 2024 is set at $1030. However, the current market rent, according to the Census American Community Survey (ACS), is approximately $720. This discrepancy highlights an opportunity for landlords to potentially increase rents towards the FMR level without losing tenants, assuming they can justify the increase through improvements or services. The gap between FMR and actual market rent suggests that rental rates have room to rise, aligning with broader economic trends and cost-of-living adjustments.
For long-hold investors, the appreciation thesis in Defuniak Springs is grounded in the fundamentals of supply and demand. The stable median home value coupled with the low percentage of price reductions points to a balanced market where appreciation is likely to be modest but consistent. While significant capital gains may not be imminent, the potential for rental income growth, driven by the widening gap between FMR and current market rents, offers a solid return on investment. This setup implies a scenario where steady rental income growth will be the primary driver of investor returns rather than rapid home value appreciation.
Landlords and small-portfolio investors should focus on enhancing property management practices and gradually adjusting rents to capture the upward trend indicated by the FMR. Maintaining high occupancy rates and managing costs efficiently will be key to maximizing profits in this environment. The current market signals a favorable climate for holding properties long-term, with a realistic expectation of gradual growth in both property values and rental incomes.
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.