Section 8 Fair Market Rent (FMR) for ZIP 57440 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

A skeptical investor might raise several concerns about investing in ZIP 57440 (Frankfort, SD). Let's address these objections with the available data.

• Will Fair Market Rent (FMR) of $1,060 (metro FY 2026) cover the mortgage on a $197,320 home?: According to recent data, the average home value in ZIP 57440 is $185,063. With current mortgage rates at 6.30%, the monthly payment on a $197,320 home would likely exceed the FMR. This suggests that relying solely on rent to cover mortgage payments may not be sufficient, especially considering the high vacancy rate of 23.2% in the area.
• Is there enough renter demand at 2.5%?: The percentage of renters in ZIP 57440 is 12.2%, which is lower than the national average. However, the current vacancy rate indicates that there is a significant supply of available units. While the demand may not be high, the supply of vacancies means that finding tenants could be challenging. Additionally, the median household income in the area is $54,375, which is below both state ($68,422) and national ($74,580) averages. This may affect the ability of potential renters to afford higher rents.
• Will vouchers keep pace with market rents?: There is no direct data available regarding the pace of housing vouchers in relation to market rents for ZIP 57440. However, given the lower median income levels compared to state and national averages, it is reasonable to assume that vouchers may struggle to keep up with increasing market rents. This could further impact the affordability of housing for low-income renters.

The data suggests that while there are some positive aspects, such as a friendly landlord climate and a 5-year compound annual growth rate (CAGR) of 6.2%, the overall investment appeal of ZIP 57440 is mixed. The high vacancy rate and lower median income levels pose challenges that must be carefully considered. New investors are advised to explore other ZIPs in the area that may offer a more stable investment opportunity.

Data Sources: FMR data from HUD (2027). 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.