Location: Gulfport-Biloxi, MS | Metro: Gulfport-Biloxi, MS 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 | $1,170 |
| 1 Bedroom | $1,370 |
| 2 Bedrooms | $1,650 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,400 |
| 5 Bedrooms | $2,784 |
| 6 Bedrooms | $3,118 |
| 7 Bedrooms | $3,367 |
| 8 Bedrooms | $3,535 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,370 | $97,944 | 1.4% | A |
| 2BR | $1,650 | $173,489 | 0.95% | C |
| 3BR | $2,120 | $254,408 | 0.83% | C |
| 4BR | $2,400 | $327,931 | 0.73% | D |
U.S. Census Bureau data (2024)
The HUD Fair Market Rent (FMR) for ZIP code 39525, which includes Diamondhead, MS, and falls under the Gulfport-Biloxi, MS HUD Metro FMR Area, is set at $1230 for fiscal year 2024. In comparison, the market rent as measured by the Zillow Observed Rental Index (ZORI) stands at $1786. This significant gap between the HUD FMR and the actual market rent suggests that landlords accepting Section 8 vouchers will only achieve positive cash flow with premium units. The median home value in this area is $244,498, leading to a rent-to-price ratio of approximately 0.7%, indicating a strong preference for homeownership over renting.
To provide a clearer picture, let's break down the numbers. If a landlord charges the HUD FMR of $1230 per month, they would be below the market rate of $1786, meaning they would likely experience negative cash flow unless their unit costs are exceptionally low. The difference between the two rates amounts to a shortfall of about $556 per month, which can quickly eat into profit margins. However, if a landlord has a higher-end property that can command closer to the market rent, they can still attract voucher holders who might be willing to pay the difference out-of-pocket, thus achieving a more favorable cash flow scenario.
The median Days on Market (DOM) of 47 days and the 0.3% price-cut share suggest that the housing market in ZIP 39525 is relatively stable, with few sellers needing to lower their prices to make a sale. These factors indicate that while the rental market may favor homeownership due to the high rent-to-price ratio, the overall stability of the housing market provides a solid foundation for long-term investment.
The strongest angle for investors in this market is stability. Despite the challenges posed by the lower HUD FMR compared to market rents, the consistent demand for housing and the limited need for price adjustments point to a reliable and steady investment environment.
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.