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 | $116,352 | 1.62% | A+ |
| 2BR | $2,230 | $395,622 | 0.56% | F |
| 3BR | $3,010 | $992,393 | 0.3% | F |
| 4BR | $3,730 | $2,032,225 | 0.18% | F |
| 5BR | $4,327 | $2,802,643 | 0.15% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 77027 in Houston, TX, hinges on a careful analysis of its yield potential and stability factors. The Fair Market Rent (FMR) for ZIP 77027 in fiscal year 2024 is set at $2,040. This figure represents the maximum monthly rent that a landlord can charge for a property to be eligible under the Section 8 program. In contrast, the average market rent stands at $1,788, indicating that landlords participating in Section 8 could potentially command a higher rent premium.
However, the median home value in ZIP 77027 is $815,832, which suggests a relatively high investment cost. Given these figures, the yield in this area is moderately attractive, but not exceptionally so, as the FMR is only about $252 higher than the market rent. This indicates a market that leans towards steady cash flow rather than high-yield returns.
Regarding stability, the ZIP code has a significant 69.8% rental rate, meaning nearly 70% of the residents are tenants. This high percentage of renters can contribute to consistent demand for rental properties. Additionally, the median household income in ZIP 77027 is $103,812, which supports a stable economic environment conducive to timely rent payments and lower tenant turnover rates.
The absence of data regarding the number of days on market (DOM) makes it challenging to assess the speed at which properties might be rented out. However, given the high rental rate and median income, it is reasonable to infer that the market is relatively stable, though not without risks associated with any urban rental market.
In conclusion, ZIP 77027 appears to be a steady-cashflow zone. While the yield is moderately positive due to the higher FMR compared to market rent, the significant rental rate and median income suggest a stable tenant base. The high median home value means that the initial investment cost is substantial, but the ongoing cash flow is reliable. Landlords and small-portfolio investors should find this ZIP code appealing for its balance between yield and stability.
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.