Location: Seattle-Bellevue, WA | Metro: Seattle-Bellevue, WA HUD Metro FMR Area
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 | $1,820 |
| 1 Bedroom | $1,900 |
| 2 Bedrooms | $2,220 |
| 3 Bedrooms | $2,890 |
| 4 Bedrooms | $3,440 |
| 5 Bedrooms | $3,990 |
| 6 Bedrooms | $4,469 |
| 7 Bedrooms | $4,827 |
| 8 Bedrooms | $5,068 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,900 | $463,481 | 0.41% | F |
| 2BR | $2,220 | $576,592 | 0.39% | F |
| 3BR | $2,890 | $681,529 | 0.42% | F |
| 4BR | $3,440 | $792,647 | 0.43% | F |
| 5BR | $3,990 | $862,431 | 0.46% | F |
U.S. Census Bureau data (2024)
The ZIP code 98108 in Seattle, WA, presents a challenging yet promising landscape for landlords and small-portfolio investors. The median income in this area stands at $95,780 per year, which equates to approximately $7,983 per month. Given the market rate for rent, known as the Zillow Observed Rent Index (ZORI), is $2,177 per month, a typical household would spend around 27% of their gross monthly income on rent alone.
Comparatively, the Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $2,210. This figure represents the maximum amount that housing authorities will pay landlords through the Housing Choice Voucher program, commonly known as Section 8. Therefore, the difference between the ZORI and the FMR is minimal, indicating that the rental market is closely aligned with the government's assessment of fair market value.
In ZIP 98108, where 41.8% of the 25,529 residents are renters, the affordability gap is significant. Households earning the median income might find it difficult to cover other living expenses while paying market rates for rent. This reality can lead to increased competition among landlords as they vie for tenants who can afford the market rates or those willing to accept voucher payments.
The takeaway for landlords considering voucher versus cash-pay strategies is clear. While voucher payments offer a guaranteed income stream and lower vacancy risk, the margin between market rates and voucher limits is narrow, making cash-paying tenants slightly more lucrative. However, landlords must be prepared to navigate the administrative requirements of accepting vouchers. In either case, understanding the local income dynamics and rental market conditions is crucial for effective strategy formulation and property management in this competitive environment.
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.