Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ 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 | $1,290 |
| 1 Bedroom | $1,390 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,360 |
| 5 Bedrooms | $2,738 |
| 6 Bedrooms | $3,067 |
| 7 Bedrooms | $3,312 |
| 8 Bedrooms | $3,478 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,390 | $362,566 | 0.38% | F |
| 2BR | $1,610 | $565,850 | 0.28% | F |
| 3BR | $2,120 | $775,717 | 0.27% | F |
| 4BR | $2,360 | $960,813 | 0.25% | F |
U.S. Census Bureau data (2024)
The Section 8 housing market in ZIP code 85003, located in Phoenix, Arizona, offers a clear opportunity for real estate investors. According to HUD Fair Market Rent (FMR) data for fiscal year 2024, the FMR for ZIP 85003 is set at $1710. In comparison, the market rent as measured by Zillow's ZORI index stands at $1684, indicating that voucher tenants will generally cashflow positively at the FMR rate without requiring premium units.
To further analyze the investment potential, consider the median home value in ZIP 85003, which is $588,591. The rent-to-price ratio can be calculated by dividing the annual rent ($1684 * 12 = $20,208) by the median home value. This yields a ratio of approximately 3.4%, suggesting that rental income is modest relative to property values but still provides a reasonable return on investment.
The dynamics between renting and buying in this area are also worth noting. With a median Days on Market (DOM) of N/A and a price-cut share of 0.3%, it indicates that the market is relatively stable, with minimal need for price reductions. This stability is crucial for both long-term rental investments and potential future sales.
In conclusion, the strongest investor angle in ZIP 85003 is cashflow. Given the positive difference between the HUD FMR and the actual market rent, along with the stable rent-to-price ratio, investors can expect consistent and reliable returns from their rental properties without significant risk. Stability in the local real estate market ensures that investors can rely on steady income streams from Section 8 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.