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 | $1,510 |
| 1 Bedroom | $1,590 |
| 2 Bedrooms | $1,890 |
| 3 Bedrooms | $2,380 |
| 4 Bedrooms | $2,800 |
| 5 Bedrooms | $3,248 |
| 6 Bedrooms | $3,638 |
| 7 Bedrooms | $3,929 |
| 8 Bedrooms | $4,125 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,590 | $248,151 | 0.64% | D |
| 2BR | $1,890 | $339,615 | 0.56% | F |
| 3BR | $2,380 | $436,803 | 0.54% | F |
| 4BR | $2,800 | $517,354 | 0.54% | F |
U.S. Census Bureau data (2024)
Austin’s 78745 ZIP code represents the heart of South Austin, a area characterized by a blend of post-war ranch homes and new construction, known for its relaxed vibe and strong community identity. The neighborhood is largely defined by its proximity to major employment hubs, offering residents convenient access to central Austin's economic engine. A key institution anchoring the area is St. Edward’s University, which not only provides educational opportunities but also contributes to local stability and demand for rental housing from faculty and staff.
From a financial perspective, the math presents a clear opportunity for voucher holders. The HUD FY2026 Fair Market Rent for a 2-bedroom unit is $1,930, while current market rent (Zillow ZORI) sits significantly lower at $1,450. This creates a substantial gap of $480 per month where Section 8 payments exceed market rates, a rare scenario that typically insulates landlords from vacancy. Property values are robust with a median home value of $425,310, though investors should note the median days on market is currently 82 days, suggesting a slightly slower sales pace compared to the city’s peak frenzy.
The tenant pool is deep, with 53.7% of households renting and a median household income of $86,109, indicating a population that can afford quality housing yet chooses the flexibility of renting. The neighborhood supports this demand with desirable amenities, including the Mary Moore Searight Metropolitan Park, which offers extensive trails and recreation. Families are drawn here by access to highly-rated schools within the Austin Independent School District, such as the performance-centric Bowie High School, ensuring consistent demand for larger 3- and 4-bedroom units.
The Section 8 verdict for 78745 is overwhelmingly positive for cash-flow focused investors. The primary driver is the $480 spread between the 2-bedroom FMR ($1,930) and market rent ($1,450), allowing landlords to secure guaranteed payments well above standard leasing rates. With a solid median income and major institutions nearby, the area offers the rare combination of government-backed revenue stability and a fundamentally strong rental market.
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.