Location: Colorado County, TX | Metro: Austin County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $900 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,600 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
U.S. Census Bureau data (2024)
The analysis for ZIP 78933 in Cat Spring, TX reveals a significant gap between the Fair Market Rent (FMR) set at $920 for fiscal year 2024 and the actual market rent, which is $1,080 per month. This represents a difference of $160, or approximately 15%, between the FMR and the market rent.
If the FMR is lower than the market rent, as it is in ZIP 78933, landlords must consider the cost of accepting housing voucher tenants who pay below open-market rates. The gap of $160 means that landlords will have to cover the difference between the voucher amount and the market rent, impacting their cash flow.
The demographic context shows that 14.3% of residents are renters, with a median income of $68,125. The median home value is $618,952, suggesting a challenging market where homes cost nearly 9.1 times the median income. This indicates affordability issues for potential homeowners, making rental properties more attractive for those unable to purchase.
The investment case in ZIP 78933 is rated as WEAK, with a score of 2.0 out of 5. This rating reflects structural challenges such as high vacancy rates and a high price-to-rent ratio, which can make cash flow difficult. The average home value is $618,952, while the average monthly rent is $1,080, resulting in a cap rate of 1.4% and a gross yield of 2.1%. These metrics indicate that the market may not be ideal for passive investors seeking high returns.
The current 30-year fixed mortgage rate of 6.3% exceeds the estimated cap rate of 1.4%, leading to negative leverage where financing reduces cash-on-cash returns. For investors, this means that the market is suitable only for those who are hands-on and willing to manage the risks associated with higher vacancy rates and lower-than-market rental incomes.
Data Sources: FMR data from HUD (2027). 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.