What is Fair Market Rent (FMR)?
Fair Market Rent (FMR) is an estimate the U.S. Department of Housing and Urban Development publishes each year of the gross rent — rent plus tenant-paid utilities — for a modest, standard-quality rental in a given metro or county. It is normally set at the 40th percentile of recent-mover rents, so 40% of comparable units rent for less. FMR is the benchmark used to set Housing Choice Voucher (Section 8) payment standards and other HUD program limits. In FY2026 the national median two-bedroom FMR is $975. It is a policy benchmark, not the market median and not a rent cap.
Source: HUD USER, FY2026 Fair Market Rents (40th percentile, revised final). Data as of June 2026.
How HUD calculates the FMR
HUD starts from the U.S. Census Bureau's American Community Survey (ACS) gross-rent data for each FMR area, focusing on rents paid by households that moved recently (so the figure reflects current market conditions, not long-held leases). It then applies a recent-mover adjustment and a current-year inflation factor to bring the estimate up to the fiscal year. The result is the 40th-percentile gross rent for a two-bedroom unit; FMRs for other bedroom sizes are derived from that anchor using national bedroom-ratio factors. The full methodology is documented in HUD's annual FMR notice.
National FMR by bedroom size (FY2026)
| Unit size | National median FMR |
|---|---|
| Studio / efficiency | $752 |
| 1-bedroom | $801 |
| 2-bedroom | $975 |
| 3-bedroom | $1,303 |
| 4-bedroom | $1,493 |
What FMR is — and is not
| FMR is... | FMR is not... |
|---|---|
| A 40th-percentile gross-rent estimate | The average or median market rent |
| The basis for voucher payment standards | A legal rent cap landlords must obey |
| Set per metro / county each fiscal year | A single statewide number |
| Inclusive of typical tenant-paid utilities | Contract rent only |
Frequently asked questions
What is Fair Market Rent (FMR)?
Fair Market Rent is an estimate, published yearly by the U.S. Department of Housing and Urban Development (HUD), of the gross rent (rent plus tenant-paid utilities) for a modest, non-luxury rental unit in a given area. By default it is set at the 40th percentile of rents for recent movers, meaning 40% of standard units rent for less. It is the basis for setting Housing Choice Voucher payment standards and several other HUD program limits.
Who sets the FMR and how often?
HUD sets FMRs each federal fiscal year (which begins October 1). They are calculated from American Community Survey rent data, updated with a recent-mover factor and a current-year inflation factor, and published per metro area and non-metro county. Local agencies can request a reevaluation if they believe the figure is wrong.
Is FMR the 40th or 50th percentile?
Standard FMRs are the 40th percentile. HUD publishes 50th-percentile FMRs for certain high-cost areas to help deconcentrate poverty, and Small Area FMRs at the ZIP-code level for some metros. RentMark uses the standard 40th-percentile area FMRs.
What is FMR used for?
FMR sets the maximum subsidy reference for the Housing Choice Voucher (Section 8) program, the Moderate Rehabilitation program, and rent ceilings for several other HUD initiatives. Some states and programs also reference FMR for rent reasonableness or emergency rental assistance.
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Last updated: 2026-06-20