Fair Market Rent Calculation Methodology
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Fair Market Rents for metropolitan areas and non-metropolitan FMR areas are developed as follows:
Calculate the Base Rent: HUD uses 2019-2023 5-year American Community Survey (ACS) estimates of 2-bedroom adjusted standard quality gross rents calculated for each FMR area as the new basis for FY2026, provided the estimate is statistically reliable. For FY2026, the test for reliability is whether the margin of error for the estimate is less than 50% of the estimate itself and whether the ACS estimate is based on at least 100 survey cases. HUD does not receive the exact number of survey cases, but rather a categorical variable known as the count indicator indicating a range of cases. An estimate based on at least 100 cases corresponds to a count indicator of 4 or higher.
If an area does not have a reliable 2019-2023 5-year estimate, HUD checks whether the area has had at least 2 minimally reliable estimates in the past 3 years, or estimates that meet the 50% margin of error test described above. If so, the FY2026 base rent is the average of the inflated ACS estimates.
If an area has not had a minimally reliable estimate in the past 3 years, HUD uses the estimate for the area's corresponding metropolitan area (if applicable) or State non-metropolitan area as the basis for FY2026.
Calculate the Basis for Recent Mover Adjustment Factor: HUD calculates a recent mover adjustment factor by comparing an ACS 2023 1-year 40th percentile recent mover 2-bedroom rent to the ACS 2019-2023 5-year 40th percentile adjusted standard quality gross rent. If either the recent mover and non-recent mover rent estimates are not reliable, HUD uses the recent mover adjustment for a larger geography. For metropolitan areas, the order of geographies examined is: FMR Area, Entire Metropolitan Area (for Metropolitan Sub-Areas), State Metropolitan Portion, Entire State, and Entire US; for non-metropolitan areas, the order of geographies examined is: FMR Area, State Non-Metropolitan Portion, Entire State, and Entire US. The recent mover adjustment factor is floored at one.
HUD first examines recent movers who have moved within the current year of the ACS survey. If there is no reliable local area estimate, HUD then examines those who have moved into their residence within the current year or preceding year of the ACS survey. Upon determining a reliable recent mover estimate, HUD calculates the appropriate recent mover adjustment factor between the 5-year data and the 1-year data.
Adjust for Inflation: In order to calculate rents that are "as of" 2024, HUD applies a gross rent inflation adjustment factor using data from commercial rent data sources and the Consumer Price Index. HUD uses a local measure of private rent inflation for markets that are covered by at least three of the six available sources of private rent data. HUD combines this local measure of rent inflation with either the local metropolitan area CPI rent of primary residence for the 23 areas where such data exist, or the regional CPI rent in areas without a local index.
For areas without at least three of the six private rent data sources available, HUD uses a regional average of private rent inflation factors alongside the regional CPI rent of primary residence. HUD constructs the regional average by taking the rental unit weighted average of the change in rents of each area in a region that does have private rent data coverage. HUD averages the private and CPI shelter rent data with the year-to-year change in the CPI housing fuels and utilities index for the area in order to make the resulting inflation measure reflective of gross rents.
The private and CPI gross rent update factors are then combined using a weighting scheme which controls the national weighted average of the private and CPI gross rent factors to the national change in the ACS recent mover gross rent. The resulting weights assigned are as follows: W2024 = 0.643 assigned to the private gross rent factor and (1-W2024) = 0.357 assigned to the CPI gross rent factor.
Calculate the Trend Factor: To further inflate rents from CY2024 to FY2026, HUD uses a "trend factor" based on the forecast of CPI gross rent changes through FY2026.
Multiply the Factors: HUD multiplies the base rent by the recent mover factor, the gross rent inflation factor, and the trend factor to produce a rent that is "as of" the current fiscal year.
Compare to the State minimum: FY2026 FMRs are then compared to a State minimum rent, and any area whose preliminary FMR falls below this value is raised to the level of the State minimum.
Calculate Bedroom Ratios: HUD calculates "bedroom ratios" and multiplies these by the two-bedroom rent to produce preliminary FMRs for unit sizes other than two bedrooms.
Compare to Last Year's FMR: FY2026 FMRs may not be less than 90% of FY2025 FMRs. Therefore, HUD applies "floors" based on the prior year's FMRs.
The results of the Fair Market Rent Step-by-Step Process
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Base Rent Calculation
The following are the 2023 American Community Survey 5-year 2-Bedroom Adjusted Standard Quality Gross Rent estimates and margins of error for Lakeland-Winter Haven, FL MSA.
Since the ACS2023 Margin of Error Ratio is less than .5, HUD uses the ACS2023 Lakeland-Winter Haven, FL MSA value for the estimate of 2-Bedroom Adjusted Standard Quality Gross Rent (Base Rent).Area ACS2023 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent ACS2023 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent Margin of Error Ratio Sample Size Category Result Lakeland-Winter Haven, FL MSA $1,098 $21 $21 / $1,098=0.01913 6 0.01913 < .5
6 ≥ 4
Use ACS2023 5-Year Lakeland-Winter Haven, FL MSA 2-Bedroom Adjusted Standard Quality Gross RentArea FY2026 Base Rent Lakeland-Winter Haven, FL MSA $1,098 -
Recent Mover Adjustment Factor Calculation
A recent mover adjustment factor is applied based on the smallest area of geography containing Lakeland-Winter Haven, FL MSA that has an ACS2023 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than .5 and a sufficient number of sample cases.
The calculation of the relevant Recent-Mover Adjustment Factor for Lakeland-Winter Haven, FL MSA is as follows:Area ACS2023 1-Year Adjusted Standard Quality Recent-Mover Gross Rent ACS2023 1-Year Adjusted Standard Quality Recent-Mover Gross Rent Margin of Error Ratio Sample Size Category Result Lakeland-Winter Haven, FL MSA – ACS 1-year recent mover 2 Bedroom $1,366 $123 0.09 1 1 < 4
Do Not Use ACS2023 1-Year Lakeland-Winter Haven, FL MSA 2-Bedroom Adjusted Standard Quality Recent-Mover Gross RentLakeland-Winter Haven, FL MSA – ACS 1-year recent mover All Bedroom $1,472 $182 0.124 2 2 < 4
Do Not Use ACS2023 1-Year Lakeland-Winter Haven, FL MSA All Bedroom Adjusted Standard Quality Recent-Mover Gross RentLakeland-Winter Haven, FL MSA – ACS 2-year recent mover 2 Bedroom $1,325 $149 0.112 3 3 < 4
Do Not Use ACS2023 1-Year Lakeland-Winter Haven, FL MSA 2 Bedroom Adjusted Standard Quality Recent-Mover Gross RentLakeland-Winter Haven, FL MSA – ACS 2-year recent mover All Bedroom $1,465 $111 0.076 5 0.076 < .5
5 ≥ 4
Use ACS2023 1-Year Lakeland-Winter Haven, FL MSA All Bedroom Adjusted Standard Quality Recent-Mover Gross RentACS2023 5-Year Area ACS2023 5-Year 40th Percentile Adjusted Standard Quality Gross Rent ACS2023 1-Year 40th Percentile Adjusted Standard Quality Recent-Mover Gross Rent Lakeland-Winter Haven, FL MSA – All Bedroom $1,160 $1,465 Area Ratio Recent-Mover Adjustment Factor Lakeland-Winter Haven, FL MSA $1,465 / $1,160
=1.2631.2629 ≥ 1.0 Use calculated Recent-Mover Adjustment Factor of 1.2629 Inflation Adjustment Factor Calculation
A gross rent inflation adjustment factor is applied based on a weighted average of a private source gross rent inflation factor and a Consumer Price Index gross rent inflation factor. Since Lakeland-Winter Haven, FL MSA is covered by at least 3 private data sources, a local-based private rent factor is applied. Furthermore, since Lakeland-Winter Haven, FL MSA is not covered by a local-CPI rent area, a Region-based CPI gross rent factor is applied.Components of 2024 Inflation Adjustment Factor for Lakeland-Winter Haven, FL MSA R2024= Shelter Rent Change, 2023 to 2024 U2024 = CPI Annual Utilities Change, 2023 to 2024 C2024 = ACS Utility Cost as a Percent of Gross Rent Gross Rent Inflation Factor Calculation = (R2024 x (1-C2024) + U2024 x C2024) Inflation Factor Type P2024= Private Inflation Factor 0.98801 1.03068 0.15649
(0.98801 * 0.84351) + (1.030684 * 0.1565)=
0.99469Local CPI2024= CPI Inflation Factor 1.05782 1.03068 0.14634
(1.05782 * 0.8537) + (1.03068 * 0.1463)=
1.05385Region The 2024 Gross Rent Inflation Factor for Lakeland-Winter Haven, FL MSA is computed as follows:
= CPI2024 x (1-W2024) + P2024 x W2024
= (1.05385 x 0.356965956) + (0.99469 x 0.643034044)
= (0.376189) + (0.63962)
= 1.01581
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Trend Factor Adjustment
The calculation of the Trend Factor is as follows: HUD forecasts the change in gross rents from 2024 to 2026 for each CPI area and Census Region. This makes Fair Market Rents "as of" FY2026.Trend Factor Trend Factor Type Trend Factor 1.06308 Region - Combination of Factors
The FY 2026 2-Bedroom Fair Market Rent for Lakeland-Winter Haven, FL MSA is calculated as follows:Area Base Rent Recent-Mover Adjustment Factor Annual 2023 to 2024 Gross Rent Inflation Adjustment Trending 2024 to FY2026 FY 2026 2-Bedroom FMR Lakeland-Winter Haven, FL MSA $1,098 * 1.2629 * 1.01581 * 1.06308 = $1,497 -
State Minimum Comparison
In keeping with HUD policy, the preliminary FY 2026 FMR is checked to ensure that it does not fall below the state minimum.Area Preliminary FY2026
2-Bedroom FMRFY 2026 Florida
State MinimumFinal FY2026 2-Bedroom FMR Lakeland-Winter Haven, FL MSA $1,497 $973 $1,497 ≥ $973 Use Lakeland-Winter Haven, FL MSA FMR of $1,497 -
Bedroom Ratios Application
Bedroom ratios are applied to calculate FMRs for unit sizes other than two bedrooms.Click on the links in the table to see how the bedroom ratios are calculated.
FY 2026 FMRs By Unit Bedrooms Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom FY 2026 FMR $1,226 $1,230 $1,497 $2,023 $2,511 -
Comparison to Previous Year
The FY2026 FMRs for each bedroom size must not be below 90% of the FY2025 FMRs.Efficiency One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom FY2025 FMR $1,085 $1,092 $1,337 $1,797 $2,245 FY2025 floor $977 $983 $1,204 $1,618 $2,021 FY 2026 FMR $1,226 $1,230 $1,497 $2,023 $2,511 Use FY2025 floor for FY2026? No No No No No
Final FY2026 Rents for All Bedroom Sizes for Lakeland-Winter Haven, FL MSA
| Final FY 2026 FMRs By Unit Bedrooms | |||||
|---|---|---|---|---|---|
| Efficiency | One-Bedroom | Two-Bedroom | Three-Bedroom | Four-Bedroom | |
| Final FY 2026 FMR | $1,226 | $1,230 | $1,497 | $2,023 | $2,511 |
The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom. For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom FMR. FMRs for single-room occupancy units are 0.75 times the zero bedroom (efficiency) FMR.