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 | $1,150 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,310 |
| 5 Bedrooms | $2,680 |
| 6 Bedrooms | $3,002 |
| 7 Bedrooms | $3,242 |
| 8 Bedrooms | $3,404 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,300 | $279,250 | 0.47% | F |
| 2BR | $1,580 | $334,878 | 0.47% | F |
| 3BR | $2,060 | $473,708 | 0.43% | F |
| 4BR | $2,310 | $774,907 | 0.3% | F |
| 5BR | $2,680 | $1,043,183 | 0.26% | F |
U.S. Census Bureau data (2024)
The real estate market in Mound, Minnesota (ZIP 55364), presents a nuanced scenario for both landlords and small-portfolio investors. With a median home value at $528,108, the market is relatively stable. The fact that only 0.2% of listings have been reduced signals strong seller pricing power. This low percentage of price reductions suggests that demand remains robust, and homeowners are holding firm on their asking prices. The median days on market (DOM) being listed as N/A could indicate either a very fast-moving market where homes sell quickly or a data collection issue, but given the low rate of price reductions, it's reasonable to infer that homes are selling swiftly.
On the rental side, the Fair Market Rent (FMR) for ZIP 55364 in fiscal year 2024 is set at $1,580. In contrast, the Zillow Observed Rental Index (ZORI) stands at $1,778. This discrepancy between government-set FMRs and actual market rents points to a rental market that is outpacing government projections. Landlords can leverage this situation to maintain or slightly increase rental rates, ensuring that they stay above the FMR while remaining competitive with market rates.
For long-term investors, the setup implies a market where appreciation might be modest. While the current conditions suggest strong pricing power for sellers, the gap between FMR and ZORI indicates a rental market that is already inflated relative to government benchmarks. This could limit the potential for significant capital appreciation in the short term. However, the stability of home values and the robust rental market provide a solid foundation for steady income generation through rentals, making Mound an attractive location for those seeking consistent cash flow rather than rapid property value growth.
Investors should focus on properties that offer a balance between rental yield and potential appreciation. Given the current median home value and rental rates, properties priced close to the median are likely to attract buyers and renters alike, providing a dual-income opportunity. Moreover, the slight premium in market rents over FMRs can be used to negotiate better terms with tenants, ensuring a steady stream of income without the need for substantial rent increases.
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.