Location: Lauderdale County, TN | Metro: Crockett County, TN 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 | $760 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,310 | $171,898 | 0.76% | D |
U.S. Census Bureau data (2024)
The real estate landscape in ZIP code 38040 presents a nuanced scenario for landlords and small-portfolio investors, particularly when considering the interplay between home values and rental market dynamics.
The median home value stands at $147,134, indicating that this area remains relatively affordable compared to national averages. However, the absence of percentage data on listings that have been reduced and the median days on market (DOM) suggest a stable housing market where neither buyers nor sellers are currently under significant pressure to negotiate. This stability can be interpreted as a sign of balanced demand and supply, which typically supports more resilient property values over time.
On the rental side, the Fair Market Rent (FMR) for ZIP 38040 in fiscal year 2024 is set at $890. In contrast, the current market rent, as per the Census American Community Survey (ACS), is approximately $654. This gap suggests an opportunity for landlords to increase rents, aligning them more closely with the FMR. The potential upward adjustment in rental rates could improve cash flows for property owners, especially if they can manage to attract tenants willing to pay closer to the FMR levels.
For long-term investors, the setup implies a realistic appreciation thesis based on the projected growth in rental income rather than speculative increases in home value. While the housing market in ZIP 38040 appears to be steady, with no immediate signs of rapid appreciation or depreciation, the rental market's trajectory towards higher rates offers a tangible path for asset appreciation. As rental incomes rise, the value of rental properties tends to follow suit, enhancing the overall investment portfolio value.
Investors should focus on the quality of their properties and the efficiency of their management practices to capitalize on the potential for increased rental income. Additionally, keeping an eye on broader economic indicators and local development projects will provide further insights into how the market might evolve, offering additional opportunities for strategic investment decisions.
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.