Location: Birmingham-Hoover, AL | Metro: Birmingham-Hoover, AL 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 | $1,000 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,650 |
| 5 Bedrooms | $1,914 |
| 6 Bedrooms | $2,144 |
| 7 Bedrooms | $2,316 |
| 8 Bedrooms | $2,432 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,170 | $153,290 | 0.76% | D |
| 3BR | $1,470 | $234,963 | 0.63% | D |
| 4BR | $1,650 | $291,163 | 0.57% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 35125, Pell City, Alabama, hinges on analyzing both yield potential and market stability. On the yield axis, the Fair Market Rent (FMR) for FY 2024 is set at $1,170, while the average market rent is lower at $925. This suggests a higher rental yield relative to the median home value of $223,898. The gap between FMR and market rent indicates opportunities for landlords who can position their properties competitively, potentially capturing rents closer to the FMR.
Turning to stability, Pell City has a notable 30.4% share of renters, which provides a decent pool of tenants. However, the lack of data on days on market (DOM) means we cannot assess how quickly properties are rented out, a key indicator of stability. Additionally, the average household income of $59,891 supports the ability of residents to afford the current market rent but raises questions about their capacity to meet the higher FMR. This could imply that while there is a solid base of potential tenants, the market may fluctuate if incomes do not rise to match the higher rents.
Based on these figures, ZIP 35125 leans towards being a high-yield/medium-stability market. It offers significant potential for landlords seeking to maximize returns through competitive pricing, given the disparity between FMR and market rent. However, the absence of DOM data and the relatively modest average income suggest that while the market is not entirely unstable, it requires careful management to ensure consistent cash flow. Landlords should be prepared to offer attractive amenities or flexible terms to attract tenants willing to pay closer to the FMR, thereby balancing the pursuit of higher yields with the need for stable occupancy.
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.