How HUD Sets Fair Market Rents Each Year
Jan 31, 2026
Every fall, the U.S. Department of Housing and Urban Development publishes new Fair Market Rents for thousands of geographic areas across the country. These numbers may look like simple rent figures, but the methodology behind them involves multiple data sources, statistical adjustments, and policy decisions designed to balance accuracy with stability.
What FMRs Are Supposed to Measure
The goal of a Fair Market Rent is to capture the 40th percentile of gross rents paid by recent movers — households that moved into their current unit within the past 15 months. This focus on recent movers is intentional: long-term tenants often pay below-market rents due to rent stabilization, long-term landlord relationships, or simply not having to pay moving costs. The FMR is meant to reflect what someone newly entering the rental market would actually pay.
"Gross rent" includes both the rent paid to the landlord and any utilities the tenant pays separately. If a unit rents for $1,200/month but the tenant pays $150 in utilities, the gross rent is $1,350.
Primary Data Source: American Community Survey
HUD's primary data source for FMRs is the Census Bureau's American Community Survey (ACS), which collects housing cost data from a large sample of households each year. HUD combines 5-year ACS estimates with more recent trend data to project current-year rents.
However, ACS data has a lag — the most recent ACS data may reflect rents from a year or two ago. HUD applies trend factors based on Consumer Price Index (CPI) housing cost data to bring the numbers closer to the present.
Annual Adjustments and Smoothing
HUD applies several adjustments to prevent large swings in FMRs from year to year. A landlord or housing authority that calibrates contracts around FMRs needs some predictability; a 30% jump in a single year would be disruptive. HUD uses smoothing techniques and limits how much FMRs can change in a single year in most circumstances.
Look up FMR areas to see current and historical FMRs for your area.