Location: Little Rock-North Little Rock-Conway, AR | Metro: Little Rock-North Little Rock-Conway, AR 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 | $970 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,820 |
| 5 Bedrooms | $2,111 |
| 6 Bedrooms | $2,364 |
| 7 Bedrooms | $2,553 |
| 8 Bedrooms | $2,681 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,130 | $133,617 | 0.85% | C |
| 3BR | $1,520 | $219,162 | 0.69% | D |
| 4BR | $1,820 | $342,971 | 0.53% | F |
| 5BR | $2,111 | $444,687 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 market analysis for ZIP code 72120 in Sherwood, Arkansas reveals a rental market where voucher tenants will typically cashflow marginally at the HUD Fair Market Rent (FMR) rate of $1110 per month for fiscal year 2024. This contrasts with the market rent rate, known as ZORI (Zillow Observed Rent Index), which stands at $1,485 per month. The discrepancy between the HUD FMR and the actual market rent indicates that landlords accepting vouchers in this area can expect a slight shortfall in covering their total costs unless they manage expenses efficiently or have premium units that command higher rents.
To further contextualize these figures, consider the median home value in the area, which is $235,045. This yields a rent-to-price ratio of approximately 0.6%, calculated by dividing the annual HUD FMR ($13,320) by the median home value. This low ratio suggests that the rental market is somewhat undervalued relative to property values, potentially offering opportunities for long-term investment in terms of both cash flow and appreciation.
The dynamics of the local real estate market, including the N/A-day median Days on Market (DOM) and a 0.2% share of listings experiencing price cuts, do not significantly impact the rent-versus-buy decision. However, these metrics indicate a stable housing market with minimal pressure on price adjustments, supporting the notion of a reliable investment environment.
The strongest angle for investors in ZIP 72120 is stability, given the low rate of price cuts and the relatively consistent demand for rental properties. While cash flow might be tighter compared to market rent, the potential for steady appreciation over time makes this a compelling option for those seeking a secure investment.
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.