Section 8 Fair Market Rent (FMR) for ZIP 78758 - 2027

Investment Score for ZIP 78758

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,480
1 Bedroom	$1,570
2 Bedrooms	$1,860
3 Bedrooms	$2,350
4 Bedrooms	$2,750
5 Bedrooms	$3,190
6 Bedrooms	$3,573
7 Bedrooms	$3,859
8 Bedrooms	$4,052

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,570	$143,886	1.09%	B
2BR	$1,860	$243,013	0.77%	D
3BR	$2,350	$388,041	0.61%	D
4BR	$2,750	$480,204	0.57%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78758 (Austin, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78758 in Austin, TX, is set by HUD for 2026. The FMR values are as follows: - 0BR: $1500 - 1BR: $1590 - 2BR: $1890 (which is 30.5% of the median household income) - 3BR: $2400 - 4BR: $2820 To understand how these FMRs compare to actual rents, we need to consider the occupancy rate and renter percentage. With a high occupancy rate of 94.4%, it suggests that there is strong demand for rental units in this area. However, the renter percentage of 73.8% indicates that a significant portion of the population relies on rental housing, which can create competitive pressures in the market. Given the high demand and limited supply, actual rents are likely to be higher than the FMRs. For example, the FMR for a 2BR unit is $1890, but the Zillow median price for a 2BR home is $250,738, indicating that the average rent could be significantly above the FMR. This discrepancy means that Section 8 voucher holders face constraints in finding affordable housing. They may struggle to find units within their budget, especially if landlords are unwilling to accept vouchers due to the perception of lower returns compared to market rates. #### Affordability & Renter Profile ZIP code 78758 has a median household income of $74,381. Given that the FMR for a 2BR unit is $1890, which represents 30.5% of the median income, it suggests that a significant portion of the population may find it challenging to afford market-rate rents. This is particularly true for those who rely solely on Section 8 vouchers, as they are limited to paying only up to the FMR. With 73.8% of the population being renters, this indicates a highly rented community. The high occupancy rate of 94.4% further supports the idea that the rental market is tight, meaning there is little room for oversupply. In such a scenario, landlords have the upper hand in setting rents, often above the FMR levels. Consequently, tenants, especially those dependent on Section 8 vouchers, might face difficulties securing housing. #### Investor Angle From an investor perspective, the key question is whether properties in ZIP code 78758 can generate positive cash flow when rented at FMR levels. To evaluate this, we must consider the price-to-FMR ratio, which stands at 11.1x for a 2BR unit. This ratio implies that the median home value is significantly higher than the FMR, suggesting that rental yields may be lower than expected. For instance, if a 2BR unit costs $250,738, and the FMR is $1890 per month, the annual rent would be $22,680. Assuming a typical mortgage interest rate of around 5%, the monthly mortgage payment would be approximately $1250, leading to a negative cash flow situation. Therefore, renting at FMR levels is unlikely to be profitable for most investors. In terms of investment grade, given the tight rental market and the high cost of homes relative to FMR, this ZIP code would be considered a low-risk investment for long-term appreciation but a high-risk investment for short-term cash flow. Investors should be prepared for lower immediate returns and focus on potential capital appreciation over time. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider smaller units like 0BR or 1BR apartments. These units have lower FMRs ($1500 and $1590 respectively), which might allow for better cash flow management. Additionally, these units are typically less expensive to purchase, reducing the initial investment required. 2. **Target Areas with Lower Home Values**: While the overall market in 78758 is expensive, there might be pockets within the ZIP code where home values are closer to the FMR. Investors should conduct thorough research to identify these areas and potentially achieve positive cash flows. 3. **Consider Long-Term Appreciation**: If immediate cash flow is not the primary goal, investors might benefit from focusing on properties that offer potential for long-term appreciation. Given the strong demand and limited supply, property values in this area are likely to increase over time, providing a solid investment opportunity. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78758 is to **Skip**. The high price-to-FMR ratio and tight rental market make it difficult to achieve positive cash flow. Instead, investors should look for areas with a more favorable ratio or consider other types of investments that align better with their financial goals.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.