Location: Steele County, MN | Metro: Rice County, MN
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 | $980 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,930 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,930 | $262,356 | 0.74% | D |
| 4BR | $2,060 | $363,402 | 0.57% | F |
U.S. Census Bureau data (2024)
ZIP code 55049, located within the Steele County, MN metro area, presents a unique profile when compared to other ZIP codes in the region. The Fair Market Rent (FMR) for 55049 is set at $1,170 for fiscal year 2026, which is notably lower than the market rent of $1,302. This indicates that rental properties in this ZIP code are slightly undervalued according to the government's standards, making it potentially attractive for landlords seeking to offer affordable housing options.
The median home value in 55049 stands at $306,165, which is consistent with the broader Steele County market, suggesting that property values here align well with the county average. However, the renter share of 14.0% is an interesting figure. Typically, higher renter shares can indicate a greater demand for rental properties, possibly due to the presence of subsidized housing programs such as Section 8. In this case, though, the renter share is relatively low, which might suggest a smaller pool of tenants relying on rental assistance.
To determine if ZIP 55049 is a value pocket, a mid-tier neighborhood, or a premium sub-market within the Steele County, MN metro, we must consider the relationship between FMR and market rent. With the FMR being lower than the market rent, but still close, 55049 leans towards being a mid-tier neighborhood. It offers rental opportunities that are somewhat affordable while maintaining market rates that are not significantly below the county average.
The alignment of home values with the county average further supports the mid-tier classification. If the home values were substantially lower, it would be more indicative of a value pocket. Conversely, if they were much higher, it could signal a premium sub-market. The slight discrepancy between FMR and market rent, along with the modest renter share, suggests that 55049 is neither a prime location for those looking for extremely low-cost rentals nor a high-end market catering to those willing to pay above-average rents.
In summary, ZIP 55049 in Steele County, MN, represents a balanced market for landlords and small-portfolio investors. The $1,170 FMR and $1,302 market rent, combined with a $306,165 median home value and 14.0% renter share, point toward a stable, mid-tier neighborhood rather than a value pocket or premium sub-market. This ZIP code provides a reasonable entry point into the rental market without the extreme characteristics that define either end of the spectrum.
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.