Location: Sioux Falls, SD | Metro: Sioux Falls, SD 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 | $950 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,240 | $321,144 | 0.39% | F |
| 3BR | $1,710 | $330,466 | 0.52% | F |
| 4BR | $2,070 | $390,412 | 0.53% | F |
| 5BR | $2,401 | $550,860 | 0.44% | F |
U.S. Census Bureau data (2024)
The HUD Fair Market Rent (FMR) for ZIP code 57005, which includes Brandon, SD, and parts of Sioux Falls, SD, stands at $1,100 for fiscal year 2024. This figure represents the maximum amount that voucher holders can pay towards their housing costs under the Section 8 program. In comparison, the market rent, as indicated by the Zillow Observed Rent Index (ZORI), is $1,298. This suggests that voucher tenants would typically cashflow marginally in this area, given the slight disparity between the FMR and the market rent.
To further analyze the investment potential, consider the median home value in the region, which is $388,723. The rent-to-price ratio, calculated by dividing the annual rent ($1,298 * 12) by the median home value, comes out to approximately 0.4%. This low ratio indicates that rental income alone might not be sufficient to cover mortgage payments and other expenses without premium units that command higher rents or have lower operating costs.
In terms of the rental versus buying dynamics, the median Days on Market (DOM) is not applicable (N/A), and the price-cut share is a mere 0.2%. These figures suggest a stable market with little need for landlords to reduce rents to attract tenants. Given the data, the strongest investor angle in ZIP 57005 is likely stability, as evidenced by the consistent median DOM and minimal price-cutting among homes for sale.
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.