Location: Peoria, IL | Metro: Peoria, IL 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 | $760 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $96,056 | 1.05% | B |
| 3BR | $1,300 | $120,418 | 1.08% | B |
U.S. Census Bureau data (2024)
In Pekin, Illinois, represented by ZIP code 61564, the real estate market presents a unique scenario that landlords and small-portfolio investors should consider carefully. The median home value stands at $114,648, which is notably lower than many comparable markets. This suggests that there is significant potential for rental income, given the relatively low entry cost into the housing market.
The absence of data on the percentage of listings being reduced and the median days on market (DOM) indicates stability in the local real estate market. Without fluctuations in listing prices or extended periods of unsold properties, it's reasonable to infer that demand for homes remains consistent. This consistency supports the idea that landlords can maintain steady rental income without needing to frequently adjust rent levels to match the market.
Turning to the rental side of the equation, the Fair Market Rent (FMR) for ZIP 61564 is projected to be $930 in fiscal year 2024, while the current market rent based on Census ACS data is approximately $800. This gap signals an opportunity for landlords to potentially increase rents closer to the FMR without losing tenants, assuming the local economy supports such increases. The rental market in Pekin appears to have room for modest growth, aligning with the broader trend of rising rents across similar markets.
For long-term investors, the setup in Pekin implies a cautious approach to appreciation expectations. With the median home value already at a competitive level and no significant indicators of rapid price increases, appreciation is likely to remain modest. However, the stability in home values and the potential for rental rate increases provide a solid foundation for maintaining property investment returns. Long-hold investors can expect their properties to retain value and offer steady income through rentals, rather than relying on substantial capital gains.
Landlords and small-portfolio investors should focus on the fundamentals of property management and maintenance to ensure they can capitalize on the existing market conditions. By keeping properties in good condition and positioning rents slightly below the FMR, they can attract and retain tenants effectively, ensuring a stable cash flow. While the market may not offer explosive growth opportunities, it provides a reliable environment for those looking to build a sustainable real estate portfolio.
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.