During the pandemic, the Sunbelt region took off. Renters flooded into metros throughout the region, and rents skyrocketed. The higher price tag could put in jeopardy the Sunbelt's most attractive quality—affordability. However, wages have also increased in the region, helping to offset some of the cost increases.

"We look closely at the rent-to-income ratio. The rent-to-income ratio is up in the Sunbelt markets, but it is only up modestly. So, rents aren't all of the sudden unaffordable, and that is because wages are helping to offset some of that increase," Jeremy Katz, co-head of CP Capital, tells GlobeSt.com. Katz adds that wage growth in the region has been at about 5% or 6% in the last year.

Population growth isn't the only reason why rents are up, however. New household formation generally increases after a recession, and that activity creates new demand for housing. "COVID hits and young people move back in with their parents. So there is a pent-up formation of new households that occurs," says Katz. "Then, the economy gets back on track and jobs are created, and all of the sudden you have a new cohort looking for a place to live. That new household formation was one of the drivers behind the new spike in rents that we have seen."