Location: Austin-Round Rock-San Marcos, TX | Metro: Austin-Round Rock-San Marcos, TX 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 | $1,890 |
| 1 Bedroom | $2,000 |
| 2 Bedrooms | $2,370 |
| 3 Bedrooms | $2,990 |
| 4 Bedrooms | $3,510 |
| 5 Bedrooms | $4,072 |
| 6 Bedrooms | $4,561 |
| 7 Bedrooms | $4,926 |
| 8 Bedrooms | $5,172 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,990 | $642,579 | 0.47% | F |
| 4BR | $3,510 | $791,957 | 0.44% | F |
| 5BR | $4,072 | $979,046 | 0.42% | F |
U.S. Census Bureau data (2024)
The ZIP code 78737, located in Austin, Texas, represents a high-end residential area known for its affluent neighborhoods and proximity to major employment centers. With a total population of 27,023, the area is characterized by a relatively low rental rate at 12.3%, indicating that the majority of residents prefer homeownership. The median household income in this ZIP stands at a robust $168,920, which places it among the higher-income brackets in the city. The median home value of $779,515 further underscores the upscale nature of the housing stock.
Moving into the realm of rental economics, the Fair Market Rent (FMR) for ZIP 78737 as set by the Department of Housing and Urban Development (HUD) for fiscal year 2024 is $2,750. This figure contrasts sharply with the actual market rent, measured by the Zillow Observed Rent Index (ZORI), which is $1,768. This discrepancy suggests a potential opportunity for landlords who can leverage the higher HUD reimbursement rates to cover costs and potentially turn a profit, especially if they manage properties efficiently.
Given these economic conditions, ZIP 78737 would be well-suited for both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the higher FMR compared to market rent provides a buffer that can offset management costs and still yield positive cash flow. On the other hand, value-add buyers could capitalize on the high median income and property values by investing in renovations and improvements to command rents closer to the FMR level, thereby maximizing returns. However, it's important to note that the relatively low percentage of renters in the area means that competition for tenants who qualify for Section 8 vouchers might be stiff, necessitating careful tenant selection and possibly a focus on maintaining a good reputation and service quality to attract and retain tenants.
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.