Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX 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 | $1,840 |
| 1 Bedroom | $1,880 |
| 2 Bedrooms | $2,230 |
| 3 Bedrooms | $3,010 |
| 4 Bedrooms | $3,730 |
| 5 Bedrooms | $4,327 |
| 6 Bedrooms | $4,846 |
| 7 Bedrooms | $5,234 |
| 8 Bedrooms | $5,496 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,880 | $175,272 | 1.07% | B |
| 2BR | $2,230 | $638,146 | 0.35% | F |
| 3BR | $3,010 | $1,279,613 | 0.24% | F |
| 4BR | $3,730 | $1,961,578 | 0.19% | F |
| 5BR | $4,327 | $2,675,339 | 0.16% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 77005 in Houston, TX, hinges on an analysis of its yield and stability metrics. The Fair Market Rent (FMR) for ZIP 77005 in fiscal year 2024 is set at $2040, which is higher than the current market rent of $1959. This suggests a potential upside in rental yields if landlords can secure tenants at the FMR rate.
However, the median home value of $1,677,616 presents a significant barrier to entry for small-portfolio investors, making it less likely that they would focus on purchasing homes in this area for rental purposes. For those who already own properties here, the higher FMR compared to the market rent could translate into better cash flows.
On the stability front, ZIP 77005 has a 28.1% share of renters, indicating a moderate level of demand for rentals. The Days on Market (DOM) average of 23 days suggests relatively quick turnover of rental listings, which is positive for landlords looking to avoid extended vacancy periods. The median household income of $229,267 supports the ability of residents to afford higher rents, contributing to the stability of rental payments.
Considering these factors, ZIP 77005 leans towards being a steady-cashflow zone. The slight premium of the FMR over the market rent indicates a modest yield advantage, while the strong median income and reasonable DOM suggest a stable environment for landlords. The high median home value, however, makes it less suitable for the typical 'flip-style' market where rapid property appreciation and turnover are key strategies. Instead, the area's characteristics support a model where long-term, consistent cash flows are prioritized over speculative gains.
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.