Location: Springfield, IL | Metro: Springfield, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,000 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,890 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,160 for ZIP 62712 can sufficiently cover the mortgage on a home valued at $327,411. According to the latest real estate market statistics, the median sales price in the 62712 zip code is $271,820.43, indicating that the home value is above average. To determine if the FMR will cover the mortgage, consider typical mortgage rates. Assuming a 30-year fixed-rate mortgage at an interest rate of 5%, the monthly payment for a $327,411 home would be approximately $1,700. This suggests that the FMR alone would not cover the mortgage payment.
The investor could also argue that the renter demand in ZIP 62712, at 12.1%, seems low. However, the data indicates that there have been 185 properties sold over the past twelve months, which signals a moderate level of activity. While the percentage of renters is indeed lower than some other areas, the absolute number of rental units and the ongoing sales suggest that there is still a reasonable demand for rentals. Additionally, the fact that home prices in 62712 have increased by 17.0% compared to the previous year, selling for a median price of $310K, implies a growing interest in the area, which could translate into higher rental demand as well.
Lastly, an investor might be concerned about whether housing vouchers will keep pace with the market rents of $1,108. The FMR of $1,160 does provide a benchmark, but it's important to note that voucher amounts can vary widely depending on the local housing authority and the specifics of the voucher program. While the FMR is a useful indicator, it's essential to consult the specific guidelines and payment standards of the housing voucher programs in the area to ensure that they align with market rents. Without detailed data on voucher amounts, it's difficult to definitively state that vouchers will cover the entire rent, but the FMR being close to the market rent suggests that vouchers should remain relatively competitive.
In conclusion, while the FMR of $1,160 may not fully cover the mortgage on a $327,411 home, there is evidence of growing interest and demand in ZIP 62712. The percentage of renters at 12.1% is low, yet the absolute number of rental units and recent sales indicate a viable market. Regarding housing vouchers, their ability to keep pace with market rents depends on specific program details, but the proximity of the FMR to market rents is promising.
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.