Location: Duluth, MN | Metro: Duluth, MN-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 | $1,280 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,280 | $239,354 | 0.53% | F |
| 2BR | $1,610 | $294,513 | 0.55% | F |
| 3BR | $2,230 | $372,690 | 0.6% | F |
| 4BR | $2,690 | $484,481 | 0.56% | F |
| 5BR | $3,120 | $644,872 | 0.48% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 55804, located in Duluth, MN, reveals a competitive yet manageable environment. The HUD Fair Market Rent (FMR) for the area in fiscal year 2024 is set at $1,440. This figure is slightly above the market rent reported by the Census Bureau's American Community Survey (ACS), which stands at $1,435. Given this comparison, voucher tenants will generally cashflow at FMR, providing a steady stream of income for landlords and small-portfolio investors.
To further understand the dynamics, consider the median home value in ZIP 55804, which is $345,713. This places the rent-to-price ratio at approximately 0.41%, indicating that rental properties are priced higher relative to their market rent. However, this does not necessarily translate into poor cashflow, as the difference between the HUD FMR and the actual market rent is minimal, suggesting a stable rental market.
The rental market in Duluth is also characterized by a quick turnover of properties. The median Days on Market (DOM) is 19 days, and only 0.2% of listings have experienced price cuts. These metrics indicate a strong demand for rental properties, which supports the viability of the rental strategy over the buy-and-hold approach.
The strongest investor angle in this market is stability. With a slight edge in cashflow due to the HUD FMR being just above the market rent, and the robust demand for rentals, investors can expect consistent returns without the volatility often associated with fluctuating 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.