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 | $1,900 |
| 1 Bedroom | $2,140 |
| 2 Bedrooms | $2,600 |
| 3 Bedrooms | $3,390 |
| 4 Bedrooms | $3,810 |
| 5 Bedrooms | $4,420 |
| 6 Bedrooms | $4,950 |
| 7 Bedrooms | $5,346 |
| 8 Bedrooms | $5,613 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,140 | $273,386 | 0.78% | D |
| 2BR | $2,600 | $423,640 | 0.61% | D |
| 3BR | $3,390 | $762,664 | 0.44% | F |
U.S. Census Bureau data (2024)
The ZIP code 55401 in Minneapolis, MN, presents a dynamic rental market with significant implications for landlords and small-portfolio investors. The Fair Market Rent (FMR) for the area is set at $2430 for fiscal year 2024, indicating the government's benchmark for affordability. In comparison, the Zillow Observed Rent Index (ZORI) stands at $1,871, suggesting that actual market rents are below the FMR, which could point to a slight over-supply situation where landlords might be adjusting their rates to attract tenants.
The low price-cut share of 0.1% suggests that most properties are being listed at or near their true market value without the need for substantial discounts. This is a positive sign for investors, as it indicates a stable pricing environment. However, the day DOM (Days on Market) being marked as N/A could imply either very quick sales or a lack of recent transactional data, which would require further investigation to understand the true velocity of the market.
A median home value of $301,803 places 55401 within a range that is attractive to both buyers and renters. For investors looking to purchase properties, this figure represents a moderate investment cost relative to other areas in Minneapolis. For those already owning rental properties, the median home value provides a context for assessing property values and potential returns.
The 71.6% renter share in ZIP 55401 highlights a strong demand for rental properties. This high percentage of renters signals ongoing long-term housing pressure, as a majority of residents prefer or are compelled to rent rather than buy. Such a trend supports the viability of rental investments and suggests that the demand for rental units is likely to remain robust. Landlords should be prepared to offer competitive rents and maintain quality living conditions to attract and retain tenants in this market.
In summary, ZIP 55401 is characterized by a rental market where demand is substantial, driven by a high renter share, but also faces some challenges in aligning market rents with government benchmarks. Investors can expect a stable yet competitive environment, with opportunities to capitalize on the strong rental demand while maintaining property values above the median of $301,803.
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.