Location: Memphis, TN | Metro: Memphis, TN-MS-AR 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 | $1,190 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,870 | $315,933 | 0.59% | F |
| 4BR | $2,160 | $400,995 | 0.54% | F |
| 5BR | $2,506 | $438,516 | 0.57% | F |
U.S. Census Bureau data (2024)
The ZIP code 38004 presents a dynamic rental market with a Federal Market Rent (FMR) set at $1580 for fiscal year 2024. This figure is notably higher than the actual market rent, which stands at $1,243 according to Census American Community Survey (ACS) data. The gap between FMR and market rent suggests that the supply of rental units might be slightly ahead of demand, as landlords adjust their rents to attract tenants.
A price-cut share of 0.3% indicates that very few properties are being discounted to sell, suggesting a stable market with little urgency among sellers. However, the lack of data on days on market (DOM) means we cannot fully assess the speed at which homes are selling, leaving some uncertainty regarding the balance between supply and demand.
The median home value in ZIP 38004 is $350,828. This figure reflects the overall stability and desirability of the area, but it also highlights a significant investment barrier for potential homeowners. For landlords and small-portfolio investors, this could mean steady capital appreciation over time, though the high entry cost may limit the pool of buyers interested in purchasing investment properties.
With a renter share of 13.4%, the ZIP code reveals a relatively low percentage of residents who choose to rent over own. This low renter share implies that there is less long-term housing pressure, as fewer people are dependent on rental units. However, it also means that the rental market is more susceptible to changes in the economy or local conditions, as a smaller portion of the population serves as a buffer against fluctuations in homeownership rates.
In summary, ZIP 38004 offers a balanced yet somewhat sluggish market for rentals, with a slight indication of oversupply. The low renter share suggests that while the market is stable, it requires careful attention to economic shifts that could impact demand. For investors, the median home value points towards a potentially lucrative market for property appreciation, albeit with a higher initial investment threshold.
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.