The multifamily sector has enjoyed a meteoric rise over the course of the pandemic, but headwinds are beginning to form for the Sunbelt, a region that's been the target of considerable investor dollars of late.

An analysis from BTIG Research predicts the staggering pace of new leases, which have posted 15 to 25% growth this year, will likely moderate, particularly in the Sunbelt region. Lease spreads appear to be near their peak in several markets, BTIG's James Sullivan and Ami Probandt note, and affordability "could become an issue" next year.

"The reported rent-to-income ratios for the REITs have remained stable as we have moved into the post-COVID period," they note. "However, the REITs only collect income data from new tenants. We would expect to see increasing turnover due to affordability in 2022. On the expense side, we expect increasing pressure on real estate taxes as a result of very strong rent growth along with continued wage pressures and insurance rate increases"⁠—though improvements in tech should offset that pressure, at least partially.