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 | $910 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $990 | $40,429 | 2.45% | A+ |
| 2BR | $1,080 | $47,823 | 2.26% | A+ |
| 3BR | $1,430 | $62,402 | 2.29% | A+ |
| 4BR | $1,640 | $77,314 | 2.12% | A+ |
| 5BR | $1,902 | $89,730 | 2.12% | A+ |
U.S. Census Bureau data (2024)
The real estate landscape in ZIP code 38106, located in Memphis, TN, suggests a market where pricing power remains relatively stable over the next 12-24 months. With a median home value of $57,769, the area represents an entry-level market segment, attracting first-time buyers and investors looking for affordable opportunities. The fact that only 0.2% of listings have been reduced indicates a seller's market, where homes are generally valued at their asking price, implying strong demand and limited need for price adjustments.
The median Days on Market (DOM) being listed as N/A could indicate either a very quick sale rate or insufficient data to provide a reliable figure. However, given the low percentage of price reductions, it's reasonable to infer that homes are selling swiftly, further supporting the notion of a robust market.
On the rental side, the Forward Monthly Rent (FMR) for ZIP code 38106 in fiscal year 2024 is set at $1110. This contrasts with the current market average rent, measured by the Zillow Observed Rent Index (ZORI), which stands at $938. This gap signals potential upside for landlords who can charge closer to the FMR, suggesting a favorable environment for rental income growth. However, it also points to the possibility of increasing competition as more investors seek to capitalize on this opportunity.
For long-term investors, the setup implies a cautious approach to appreciation expectations. While the current conditions support maintaining or slightly increasing property values, the low median home value and the modest difference between FMR and ZORI suggest limited room for significant appreciation. Investors should focus on steady rental income and possibly consider value-add strategies to enhance property value rather than relying on broad market appreciation.
In summary, ZIP code 38106 offers a balanced real estate market where pricing power is evident but appreciation potential is constrained. Landlords and small-portfolio investors should leverage the strong rental market while being mindful of the limitations imposed by the overall value of properties in the area.
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.