The 1% rule says a $300,000 house should rent for $3,000 a month. Across most of the US, rents on a house at that price are nowhere close. The rule did not get stricter — prices and rates moved out from under it.
The 1% rule: monthly rent should be at least 1% of the purchase price. Buy at $200,000, collect $2,000 a month. It survived because it is fast — you can apply it to a listing in three seconds. What it never was is a valuation method. It is a filter, calibrated to a specific era of prices, rents, and mortgage rates, and that calibration expired.
— Educational, not financial advice.