Location: Union County, MS | Metro: Pontotoc County, MS
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 | $810 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,340 |
| 5 Bedrooms | $1,554 |
| 6 Bedrooms | $1,740 |
| 7 Bedrooms | $1,879 |
| 8 Bedrooms | $1,973 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $920 | $155,304 | 0.59% | F |
| 3BR | $1,150 | $254,306 | 0.45% | F |
| 4BR | $1,340 | $366,476 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 38652, located in New Albany, Mississippi, provides valuable insights into the potential returns for landlords and small-portfolio investors. To begin, let's consider the Fair Market Rent (FMR) for a two-bedroom property, which is set at $900 annually according to the FY 2026 metro rates. When we annualize this figure, it represents a gross yield of approximately 4.5% when compared to the median home value of $199,928. This calculation is straightforward: ($900 / $199,928) * 100 = 4.5%.
Next, let's look at the market rent, which stands at $906 annually based on the Census ACS data. Using the same median home value, this translates to a slightly higher gross yield of about 4.53%. The calculation here is: ($906 / $199,928) * 100 = 4.53%. While this difference is minimal, it does suggest that market rents offer a marginally better return than the FMR.
Given the 28.2% renter density in New Albany, it's important to note that while there is a significant portion of renters, it also implies that a substantial number of residents are homeowners. This factor should be considered when evaluating the demand for rental properties, particularly those participating in the Section 8 program. Additionally, the N/A-day DOM (Days on Market) indicates incomplete data, possibly due to a low volume of sales or rentals, which could affect the accuracy of the median home value used in our calculations.
In conclusion, the gross yields derived from both the FMR and market rent figures are nearly identical, hovering around 4.5%. However, the market rent scenario provides a slightly more optimistic outlook. Given the available data, landlords and investors should focus on the robustness of the local rental market and the specific dynamics of the Section 8 program in New Albany to make informed decisions. The slight edge in gross yield from market rents underscores the importance of understanding local market conditions beyond just the FMR.
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.