Location: Albuquerque, NM | Metro: Albuquerque, NM 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 | $1,470 |
| 1 Bedroom | $1,670 |
| 2 Bedrooms | $2,080 |
| 3 Bedrooms | $2,860 |
| 4 Bedrooms | $3,370 |
| 5 Bedrooms | $3,909 |
| 6 Bedrooms | $4,378 |
| 7 Bedrooms | $4,728 |
| 8 Bedrooms | $4,964 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,080 | $431,214 | 0.48% | F |
| 3BR | $2,860 | $646,013 | 0.44% | F |
| 4BR | $3,370 | $772,935 | 0.44% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,590 for ZIP code 87043 (Placitas, NM) in fiscal year 2024 will sufficiently cover the mortgage on a home priced at $643,765. To address this, we must consider the typical mortgage payment based on average interest rates. Assuming a 30-year fixed-rate mortgage at an average rate of 4.5%, the monthly principal and interest payment on a loan of $643,765 would be approximately $3,230. This figure is significantly higher than the FMR, indicating that FMR alone is insufficient to cover the mortgage. However, it's important to note that the FMR is set to ensure affordability for low-income households, not necessarily to match the full market value of homes.
The next concern could be the level of renter demand, which stands at 6.1% in Placitas. This percentage represents the proportion of renters in the total housing stock. A lower percentage suggests less demand for rental properties compared to owner-occupied units. However, it's crucial to understand that even with a modest rental market share, the actual number of rental units can still support a healthy investment portfolio if managed well. The key is to ensure that the property is competitive in terms of location, amenities, and condition to attract tenants.
Lastly, an investor might wonder if Housing Choice Vouchers will keep up with the market rents, which are currently at $2,717. The voucher amount is adjusted annually but is typically lower than market rents. In ZIP 87043, the average voucher payment is not specified in the provided data, but historically, voucher payments have been around 70-80% of the FMR. Given the FMR of $1,590, this would suggest a voucher payment range of approximately $1,113 to $1,272. This is clearly below the market rent of $2,717, leaving a gap that landlords must either fill themselves or negotiate with tenants. While this gap exists, it's also worth noting that voucher holders often represent a stable tenant base due to the financial security provided by the government subsidy.
In summary, while the FMR does not cover the mortgage on a home valued at $643,765, it serves a different purpose in the market. The rental market share of 6.1% indicates a smaller pool of potential tenants, but careful management can still make rental investments viable. Lastly, the discrepancy between voucher payments and market rents means landlords must be prepared to accept lower rents or seek additional income sources to remain financially sound.
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.