Location: St. Louis, MO | Metro: St. Louis, MO-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 | $1,260 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,370 |
| 5 Bedrooms | $2,749 |
| 6 Bedrooms | $3,079 |
| 7 Bedrooms | $3,325 |
| 8 Bedrooms | $3,491 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,600 | $208,697 | 0.77% | D |
| 3BR | $2,050 | $314,233 | 0.65% | D |
| 4BR | $2,370 | $429,189 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 63088, Valley Park, MO, reveals a specific rental yield scenario that investors should consider. The Fair Market Rent (FMR) for a 2-bedroom apartment in FY 2024 is set at $1390 per month, while the market rent based on Census ACS data stands at $1,402 monthly. To derive the cap rates, we annualize these figures against the median home value of $292,199.
Using the FMR of $1390, the annual rent would be $16,680. This translates into an implied gross yield of approximately 5.71% ($16,680 / $292,199). In contrast, using the market rent figure of $1,402, the annual rent would be $16,824, leading to an implied gross yield of about 5.76% ($16,824 / $292,199).
The difference between these two yields is minimal, reflecting the close alignment between the FMR and market rent in this area. However, the more realistic scenario for investors is likely to be the market rent figure of $1,402, considering the 47.0% renter density in Valley Park. A higher proportion of renters suggests a robust demand for rental properties, which supports achieving the market rent over the government-set FMR.
Despite the slight advantage in gross yield when using market rent, it's important to note that the day-on-market (DOM) data is marked as N/A. This lack of information means investors cannot accurately gauge how quickly units might turn over, which could impact the overall investment performance.
In summary, the gross yields for Section 8 properties in ZIP 63088 hover around 5.7%, with the market rent providing a slightly better return. Given the strong rental market indicated by the high renter density, investors should aim for the market rent when calculating potential returns. However, they must also factor in the uncertainty regarding property turnover rates.
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.