Location: Chicago-Joliet-Naperville, IL | Metro: Chicago-Joliet-Naperville, IL 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 | $2,520 |
| 1 Bedroom | $2,670 |
| 2 Bedrooms | $3,020 |
| 3 Bedrooms | $3,880 |
| 4 Bedrooms | $4,440 |
| 5 Bedrooms | $5,150 |
| 6 Bedrooms | $5,768 |
| 7 Bedrooms | $6,229 |
| 8 Bedrooms | $6,540 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,670 | $362,346 | 0.74% | D |
| 2BR | $3,020 | $605,833 | 0.5% | F |
| 3BR | $3,880 | $1,394,872 | 0.28% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 60601 in Chicago, IL, reveals several key points for landlords and small-portfolio investors.
The rent math does not work favorably for landlords. The Fair Market Rent (FMR) set at $2,570 for the fiscal year 2024 is notably lower than the market rent indicated by Zillow's Observed Rental Index (ZORI), which stands at $2,901. This discrepancy suggests that landlords may struggle to cover costs and maintain profitability if they adhere strictly to the FMR guidelines.
Acquisition of properties in ZIP 60601 is moderately affordable. With a median home value of $346,395, the cost of entry into the market is reasonable compared to other areas in Chicago. However, the 48-day Days on Market (DOM) and a 0.1% price-cut share indicate that the market is relatively tight, with homes selling quickly and few needing price reductions. This implies that competition for property acquisitions could be high, potentially driving up purchase prices.
Tenant demand is strong in this area. The ZIP code has a population of 15,235, with 71.8% of residents being renters. This high renter share suggests a robust pool of potential tenants, making it likely that rental properties will remain occupied.
Verdict: Despite the favorable tenant demand, the fiscal mismatch between the FMR and market rents poses a significant challenge for landlords. While property acquisition is affordable in terms of median home values, the quick sale times and minimal price adjustments suggest a competitive market. Investors should carefully consider these factors before committing to the 60601 ZIP code, ensuring that they can manage costs effectively and leverage the strong rental market to their advantage.
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.