Location: Jefferson County, WI | Metro: Milwaukee-Waukesha, WI MSA
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 | $1,120 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,790 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,790 | $593,592 | 0.3% | F |
| 4BR | $1,910 | $699,349 | 0.27% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,390 for ZIP 53118 can sufficiently cover the mortgage on a median-priced home valued at $599,621. To address this, consider that FMR is set by HUD to ensure housing affordability and typically reflects the 40th percentile of market rents. While it's true that an FMR of $1,390 may not fully cover the mortgage on a home priced at $599,621, particularly if financed at current interest rates, the FMR is not intended to be the sole determinant of rental pricing. Landlords can set rents above FMR to meet their financial obligations.
The investor could also doubt the strength of the rental market, given that only 13.1% of households in ZIP 53118 rent their homes. However, this percentage does not tell the whole story. A lower renter demand does not necessarily equate to a weak rental market. In ZIP 53118, the rental vacancy rate is likely to be a key indicator of market health. If the vacancy rate is low, it suggests strong demand relative to supply, even if the absolute number of renters is modest. Conversely, a high vacancy rate could indicate oversupply and weaker demand. Without the exact vacancy rate, it's difficult to provide a definitive assessment, but the percentage of renters alone should not be used as a sole criterion for investment decisions.
Another concern might be whether Housing Choice Vouchers will keep up with the $1,394 market rents. The voucher program aims to cover about 30% of a household's income towards rent, subject to local payment standards. If the voucher amount is significantly below the market rent, landlords might find it challenging to attract tenants who rely solely on vouchers. According to the latest data, the average voucher payment in ZIP 53118 is not provided, making it impossible to determine if it will keep pace with market rents. However, HUD periodically adjusts voucher amounts to reflect changes in the cost of living and market conditions. It's advisable to monitor these adjustments closely to ensure they align with market rents.
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.