Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI 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 | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,270 | $927,394 | 0.14% | F |
| 2BR | $1,540 | $621,863 | 0.25% | F |
| 3BR | $2,040 | $670,036 | 0.3% | F |
| 4BR | $2,280 | $899,617 | 0.25% | F |
| 5BR | $2,645 | $1,268,279 | 0.21% | F |
U.S. Census Bureau data (2024)
In Shorewood, Minnesota (ZIP 55331), the real estate market is signaling strong pricing power for the next 12-24 months. With a median home value at $810,173, only 0.2% of listings have been reduced, indicating that sellers are maintaining their prices and buyers are willing to meet them. This stability in listing prices, combined with a low median days on market (DOM) of 26 days, suggests a robust demand for homes in the area.
The rental market provides additional insight into the overall housing demand. The Fair Market Rent (FMR) for ZIP 55331 in fiscal year 2024 is set at $1,510, while the actual market rent, as measured by Zillow's ZORI, stands at $2,060. This significant gap between government estimates and market realities points to a strong preference among residents for owning rather than renting, which further supports the likelihood of continued price stability and potentially upward pressure on home values.
For long-hold investors in Shorewood, the data implies a realistic appreciation thesis based on sustained demand and limited price reductions. The low percentage of price reductions and short DOM indicate that the supply of homes is tight relative to demand, a condition that typically leads to gradual increases in home values over time. However, the exact rate of appreciation cannot be determined from the current data. What can be inferred is that the market conditions favor maintaining property values and possibly seeing modest growth, particularly if economic factors supporting home ownership remain favorable.
The setup in Shorewood also suggests that landlords might face challenges in retaining tenants who prefer to purchase homes over renting due to the higher cost of rent compared to the FMR. This could lead to increased turnover rates or necessitate improvements to compete with the homeownership market. For small-portfolio investors, focusing on properties that offer a balance between rental income and potential resale value could be a prudent strategy.
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.