Location: Bismarck, ND | Metro: Bismarck, ND 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 | $970 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,640 |
| 4 Bedrooms | $1,890 |
| 5 Bedrooms | $2,192 |
| 6 Bedrooms | $2,455 |
| 7 Bedrooms | $2,651 |
| 8 Bedrooms | $2,784 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,180 | $283,428 | 0.42% | F |
| 3BR | $1,640 | $422,891 | 0.39% | F |
| 4BR | $1,890 | $488,674 | 0.39% | F |
| 5BR | $2,192 | $530,642 | 0.41% | F |
U.S. Census Bureau data (2024)
In evaluating the potential of investing in ZIP code 58503, which encompasses Bismarck, North Dakota, several key concerns arise. Let's address these points head-on.
The first objection is whether the Fair Market Rent (FMR) of $1,070 for fiscal year 2024 will sufficiently cover the mortgage on a home priced at $448,751. To determine this, we must consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $448,751 home would be approximately $2,375. This figure clearly exceeds the FMR of $1,070, indicating that the FMR alone would not cover the mortgage payments. Landlords and investors would need to consider additional income sources or strategies to ensure profitability.
A second concern is the level of renter demand, given that only 25.7% of households in Bismarck are renters. This percentage suggests a relatively low demand for rental properties compared to areas with higher concentrations of renters. However, it's important to note that the percentage does not tell the whole story. The actual number of renters can still support a viable rental market if the vacancy rate is low and the rental income is stable. Additionally, the percentage of renters may not be indicative of the total rental market size; other factors such as population growth and job opportunities also play a role in sustaining demand.
The final objection pertains to whether Housing Choice Vouchers will keep pace with the market rents of $1,546. The Housing Choice Voucher program aims to help low-income families afford decent housing, but the amount covered by vouchers can vary significantly based on local market conditions and the specific policies of the local housing authority. In ZIP 58503, the voucher amount might not match the full market rent of $1,546, potentially leaving landlords to subsidize the difference. While this can be a challenge, it's worth noting that voucher holders often have stable income and credit histories, making them reliable tenants. Moreover, the stability of Bismarck's economy and the low unemployment rate can contribute to a steady stream of voucher recipients who are able to maintain their tenancy.
To conclude, while the data presents some challenges—such as the gap between FMR and mortgage payments, and the potential mismatch between voucher amounts and market rents—it also highlights opportunities. The relatively low percentage of renters does not necessarily preclude a profitable rental market, especially when considering the overall economic stability of Bismarck. Investors should conduct thorough due diligence, including assessing local vacancy rates and understanding the specifics of the Housing Choice Voucher program in Bismarck, to make informed decisions.
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.