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 | $900 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $980 | $60,013 | 1.63% | A+ |
| 2BR | $1,070 | $57,843 | 1.85% | A+ |
| 3BR | $1,410 | $80,771 | 1.75% | A+ |
| 4BR | $1,630 | $110,250 | 1.48% | A |
| 5BR | $1,891 | $136,775 | 1.38% | A |
U.S. Census Bureau data (2024)
The ZIP code 38114 in Memphis, Tennessee, presents a market in motion, characterized by a balance between rental affordability and homeownership values. The Fair Market Rent (FMR) for ZIP 38114 stands at $1090 for fiscal year 2024, indicating the threshold set by the U.S. Department of Housing and Urban Development (HUD) for determining eligibility for Section 8 housing assistance. Meanwhile, the actual market rent, measured by Zillow's ZORI, is lower at $962. This suggests that while rents are affordable, they are approaching the government-set FMR, signaling potential upward pressure on rental costs.
The median home value in ZIP 38114 is $74,125, which is notably low compared to national averages. However, the 0.2% price-cut share implies that very few homes are being discounted, suggesting a stable pricing environment. The lack of data on days on market (DOM) could indicate either a highly efficient local real estate market or that there is insufficient transactional data to provide a reliable figure.
A critical insight into the housing dynamics of 38114 comes from the 54.0% renter share. This high percentage of renters indicates significant long-term housing pressure, as it suggests a substantial portion of the population cannot afford to purchase homes. Landlords and small-portfolio investors should consider this statistic as it points to a consistent demand for rental properties, which can be leveraged for steady income generation. The high renter share also means that any future increase in mortgage rates or home prices could further push residents towards renting, thereby increasing the reliance on rental markets.
In conclusion, ZIP 38114 appears to be a market where demand for rentals is strong, given the high renter share and the proximity of market rents to the FMR. The low median home value and stable pricing suggest that homeownership is less prevalent but also less volatile. For investors, focusing on rental properties could be a prudent strategy, as the dynamics indicate a robust need for affordable housing options.
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.