FY2026 FMR Changes: Which Metros Jumped — and Which Fell
FY2026 FMR changes across ten investor markets: real HUD year-over-year data showing Cleveland and Milwaukee up ~6%, Memphis and Baltimore down 5-7%, and why.
Every October, HUD reprices the entire Section 8 universe. The FY2026 Fair Market Rents took effect October 1, 2025, and this cycle did something the 2021–2024 runs didn't: it split the map. Some Midwest metros posted 6% increases while two of the biggest Section 8 markets in the country — Memphis and Baltimore — saw FMRs fall 5–7%. If you're underwriting voucher deals in 2026, the direction of your metro's FMR is as important as its level.
We pulled the FY2025 and FY2026 FMRs directly from HUD's data for the ten areas we track. Here's the full picture.
The FY2026 scoreboard (3-bedroom FMRs)
| Area | FY2025 3BR | FY2026 3BR | Change |
|---|---|---|---|
| Cleveland, OH metro (Cuyahoga) | $1,553 | $1,646 | +6.0% |
| Milwaukee, WI (Milwaukee Co.) | $1,558 | $1,648 | +5.8% |
| Detroit, MI metro (Wayne) | $1,688 | $1,724 | +2.1% |
| Pittsburgh, PA metro (Allegheny) | $1,632 | $1,661 | +1.8% |
| Toledo, OH (Lucas Co.) | $1,371 | $1,380 | +0.7% |
| Birmingham, AL metro (Jefferson) | $1,583 | $1,583 | 0.0% |
| St. Louis, MO-IL metro | $1,570 | $1,568 | -0.1% |
| Memphis, TN-MS-AR metro (Shelby) | $1,781 | $1,683 | -5.5% |
| Baltimore, MD metro | $2,529 | $2,358 | -6.8% |
Two-bedroom moves tell the same story: Milwaukee +6.4%, Cleveland +5.9%, Toledo +1.9%, Pittsburgh +1.5%, Detroit +2.4%, St. Louis +0.2%, Birmingham -0.1%, Baltimore -5.5%, Memphis -6.0%.
The winners: Cleveland and Milwaukee
Cleveland's metro 3BR jumped $93 and Milwaukee's $90 — roughly $1,100/year of additional voucher ceiling per unit, before the payment-standard multiplier. Milwaukee's increase was broad-based across bedroom counts (efficiencies +9.4%, 2BR +6.4%), consistent with a metro where rents kept climbing through the survey window.
What a rising FMR does for an owner:
- Renewal headroom. If your contract rent was pinned near last year's payment standard, the new standard likely gives your next increase request room — subject, as always, to rent reasonableness comps.
- Payment standards follow. PHAs typically refresh standards off the new FMRs in the months after October 1; the 90–110% band moves up with its anchor.
The losers: Memphis and Baltimore
Memphis fell 5.5% on 3BRs and 6.0% on 2BRs; Baltimore fell 6.8% and 5.5% — with Baltimore's 4BR down 7.6%, the largest single move in our table. Both metros absorbed heavy new rental supply and softening rents, and HUD's methodology (recent-mover ACS data trended forward) passed the correction through.
What a falling FMR means in practice:
- New leases price against a lower ceiling. The payment standard that gets set from a lower FMR caps your next tenancy below your last one, in the same unit.
- Existing tenancies feel it at renewal. Increase requests get harder, and where market softness shows up in the comps, rent reasonableness reviews bite.
- Your margin of safety just moved. Deals underwritten at the FY2025 ceiling in Memphis or Baltimore need re-running at FY2026 numbers. The markets still work — Baltimore's $2,358 3BR remains the highest in our set — but the escalator you may have modeled is now a descent.
The stable middle
Detroit (+2.1%), Pittsburgh (+1.8%), Toledo (+0.7%), Birmingham (0.0%), and St. Louis (-0.1%) form the flat middle. For underwriting, flat is informative: assume today's payment standard is roughly next year's, and make the deal work without growth. Toledo is the interesting edge case — after strong increases in earlier cycles, its near-zero FY2026 move suggests HUD sees the market fully caught up.
Why FMRs move like this
FMRs are built from American Community Survey gross-rent data for recent movers, trended forward with rent inflation forecasts. That means:
- They lag. The FY2026 numbers largely reflect leases signed a year or two earlier — a metro's 2024–2025 softness lands in FY2026's print.
- They mean-revert around supply. Sunbelt-style apartment deliveries (Memphis) show up as falling FMRs a cycle later; underbuilt Midwest metros (Cleveland, Milwaukee) keep grinding up.
- Big cuts have a floor mechanism. HUD policy limits how sharply FMRs can fall year-to-year, and PHAs aren't forced to cut payment standards immediately — attrition softens the tenant-side impact. The ceilings move faster than the contracts under them.
Small Area FMR metros add a wrinkle: the metro trend and your ZIP's trend can diverge. Cleveland's +6.0% metro move, for instance, was not uniform across Cuyahoga County's 126 ZIP-level schedules — always re-pull the specific ZIP rather than applying the metro percentage to last year's SAFMR.
What to do with this
- In rising metros, revisit every below-standard contract rent at renewal — with comps in hand for the reasonableness review.
- In falling metros, stress-test at the FY2026 standard minus a margin, and treat any rent above the new comp level as temporary.
- Everywhere, remember the level still beats the trend: Baltimore down 6.8% still supports $600+ more 3BR rent than Cleveland up 6.0%. Trend tells you where the ceiling is going; the spread against your local market rent tells you whether the deal works today.
The FY2026 number for any specific address — including ZIP-level Small Area FMRs in the metros that use them — is one paste away: paste an address, get the full spread report free.
This article is for general information only and is not investment, legal, or tax advice. All FMR figures are HUD's published FY2025 and FY2026 data for the areas named; percentage changes are computed from those figures. Payment standards are set locally and adjust on their own schedules — confirm with your housing authority.