Location: Mobile, AL | Metro: Mobile, AL 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 | $820 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,280 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $172,189 | 0.57% | F |
| 3BR | $1,280 | $243,604 | 0.53% | F |
| 4BR | $1,360 | $399,821 | 0.34% | F |
U.S. Census Bureau data (2024)
The real estate market in ZIP 36604 (Mobile, AL) presents a nuanced scenario for landlords and small-portfolio investors. With a median home value of $198,004, the area remains relatively affordable compared to national averages, yet it also indicates limited room for significant price increases. The fact that only 0.2% of listings have been reduced signals a stable market where sellers maintain confidence in their asking prices. However, the absence of data on the median days on market (DOM) suggests either a very active market where homes sell quickly, or an issue with data collection that could merit further investigation.
On the rental side, the Federal Market Rent (FMR) for ZIP 36604 in fiscal year 2024 is projected at $990, while the Zillow Observed Rental Index (ZORI) currently stands at $1,096. This gap between government estimates and actual market rents suggests a potential for downward pressure on rental rates as the market adjusts to align with federal benchmarks. Landlords should be prepared for a possible decrease in rental income, particularly if they are charging above the FMR.
For long-term hold investors, the setup in ZIP 36604 implies a cautious approach to appreciation expectations. Given the stability in home values and the modest percentage of price reductions, there is little evidence to support a robust appreciation thesis over the next 12-24 months. Instead, investors might focus on the steady rental income and the potential for capital preservation rather than growth. While the rental market currently offers a slight premium over the FMR, this advantage may erode as the market moves towards equilibrium with federal estimates.
In summary, the data points towards a market characterized by stability rather than rapid change. Investors should prioritize maintaining competitive rental rates and be prepared for a period where appreciation is unlikely to be a significant factor in their investment returns. The current environment supports a strategy focused on cash flow and long-term asset management.
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.