In their paper “Alternative Fair Market Rents for Local Housing Markets,” a research team from the Urban Institute explored the use of time series models and alternative data sources to improve FMR trend factor estimation in markets with rapidly rising rents. The authors first defined areas considered to have rapidly rising rents and then identified factors believed to be leading indicators of housing supply and demand for which publicly available county-level data are available on a timelier basis than the data currently used to estimate FMRs. Alternative FMRs were estimated using ARIMA and ARIMAX time series models along with the timelier data sources, and the results were then compared to FMR estimates produced by HUD in prior years. The team concluded that FMR estimation overall could be improved with the use of county-level data, but their models were limited in their ability to accurately predict future rents in counties with rapidly rising rents.

 Foreword

 Research Brief from this report.

 Fact Sheet from this report.

Related FMR studies from 2023:

Click the link to access Alternative Methods For Calculating Fair Market Rents (FMRs) in Rental Markets with Rapidly Rising Rents

Click the link to access Fair Market Rents Trend Component Modeling Technical Report