What Is Fair Market Rent (FMR)?
Fair Market Rent is the amount of money that a given property would command if it were available for rent on the open market. HUD estimates FMRs annually for 2,500+ geographic areas. FMR is set at the 40th percentile of gross rents for standard quality rental units, meaning 40% of rental units in the area rent at or below the FMR.
FMRs are calculated by the Department of Housing and Urban Development (HUD) using American Community Survey data, local rental surveys, and CPI rent adjustments. They are published by bedroom count: 0-bedroom (efficiency/studio), 1-bedroom, 2-bedroom, 3-bedroom, and 4-bedroom.
FMRs serve two primary purposes. First, they set the payment standard for the Housing Choice Voucher (Section 8) program, the voucher value is based on the local FMR. Second, they serve as a benchmark for rental affordability analysis. When AffordMap shows "median 2BR rent" on salary pages, that figure comes from HUD FMRs.
FMR represents the 40th percentile, not the median (50th) or average. This means actual market rents for "typical" apartments are often 10-20% higher than the FMR, particularly in competitive urban markets where landlords can be selective. In hot markets like Austin or Nashville, the gap between FMR and actual asking rents can be even wider.
FMRs are published by fiscal year (October through September) and are typically available 3-6 months before the fiscal year begins.
Example
The current HUD FMR for a 2-bedroom apartment in Dallas-Fort Worth-Arlington is $1,931/month. This means 40% of standard-quality 2-bedroom rental units in the metro rent at or below that amount. Actual asking rents on listing sites may run 10-20% higher.
Data source
U.S. Department of Housing and Urban Development. View source data (opens in new tab)
Related terms
See fair market rent (fmr) applied to real salary data
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