Location: Fayetteville-Springdale-Rogers, AR | Metro: Fayetteville-Springdale-Rogers, AR 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 | $910 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $192,691 | 0.63% | D |
| 3BR | $1,690 | $259,658 | 0.65% | D |
| 4BR | $2,000 | $331,278 | 0.6% | D |
| 5BR | $2,320 | $522,929 | 0.44% | F |
U.S. Census Bureau data (2024)
In Siloam Springs, Arkansas, located in ZIP code 72761, the median fair market rent (FMR) for 2024 is set at $980. This figure raises immediate concerns for landlords and small-portfolio investors regarding whether it will sufficiently cover the mortgage on an average home valued at $282,542. The FMR is designed to reflect the rent necessary to cover housing costs for a typical unit, but it does not directly correlate with mortgage payments. To accurately assess if the FMR covers the mortgage, one must consider the interest rate and loan terms. Assuming a standard 30-year fixed-rate mortgage at a current average rate of around 6%, the monthly mortgage payment on a $282,542 home would be approximately $1,700. Clearly, the FMR of $980 falls short, indicating that landlords should expect to subsidize the difference between the rent and the mortgage payment.
The rental demand in ZIP 72761 stands at 34.6%, which is another point of contention for potential investors. This percentage represents the proportion of renters in the population. While 34.6% is a significant portion, it suggests that the majority of residents prefer homeownership over renting. However, the presence of Northwest Arkansas Community College and the local job market can bolster demand. Additionally, the demographic trends show a growing number of young professionals and families, who often prefer renting. Thus, while the overall percentage might seem low, the specific needs of the community can still support a healthy rental market.
A final objection pertains to the ability of Section 8 vouchers to keep pace with market rents, which currently stand at $1,371. The FMR of $980 is lower than the market rent, which could pose challenges for voucher holders trying to find suitable housing. However, the Housing Choice Voucher program adjusts its payment standards annually based on market conditions. In 2024, the adjustment process will likely ensure that voucher amounts better align with the $1,371 market rent, thereby making it feasible for tenants to secure housing in line with their needs. It's important to note that landlords should also factor in the administrative ease and stability that comes with accepting Section 8 vouchers, despite the initial financial gap.
To summarize, while the FMR of $980 does not fully cover the mortgage on a $282,542 home, the rental demand at 34.6% is supported by local demographics. Furthermore, adjustments to voucher amounts should help bridge the gap between the FMR and the market rent of $1,371. These insights provide a balanced view of the investment landscape in ZIP 72761, highlighting both the challenges and opportunities present for landlords and small-portfolio investors.
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.