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 | $1,690 |
| 1 Bedroom | $1,780 |
| 2 Bedrooms | $2,120 |
| 3 Bedrooms | $2,670 |
| 4 Bedrooms | $3,140 |
| 5 Bedrooms | $3,642 |
| 6 Bedrooms | $4,079 |
| 7 Bedrooms | $4,405 |
| 8 Bedrooms | $4,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,120 | $500,078 | 0.42% | F |
| 3BR | $2,670 | $605,202 | 0.44% | F |
| 4BR | $3,140 | $830,141 | 0.38% | F |
| 5BR | $3,642 | $1,152,018 | 0.32% | F |
U.S. Census Bureau data (2024)
ZIP 78738, located in the Austin-Round Rock-San Marcos, TX MSA metro area, serves well as an appreciation play within a Section 8 portfolio strategy. The primary reason for this classification lies in the relatively low price-cut share and the extended days on market (DOM) compared to other areas.
The Fair Market Rent (FMR) for ZIP 78738 in fiscal year 2024 is set at $2390, which is slightly above the market rent of $2,216. This indicates that properties in this ZIP code can command rents that are competitive with government standards, providing a stable cash flow. However, the key factor that makes this ZIP code an appreciation play is its 0.2% price-cut share and a DOM of 61 days. These figures suggest that the housing market in 78738 is robust and resistant to significant price reductions, indicating strong demand and potential for property value appreciation over time.
Furthermore, the median home value in ZIP 78738 stands at $840,144, reflecting a high-end residential area. While this might seem prohibitive for some Section 8 tenants who have strict income limits, the median income of $183,048 in the area suggests a higher economic status among residents, potentially leading to better-maintained properties and lower vacancy rates. The renter share of 24.7% is moderate, implying that while there are enough renters to support a Section 8 strategy, the majority of homeownership provides a solid foundation for property values.
In conclusion, ZIP 78738 offers a balanced environment for appreciation plays within a Section 8 portfolio. Its low price-cut share and extended DOM signal a strong market that supports property value growth, making it a strategic choice for investors focused on long-term capital 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.