The first half of 2022 was a rough stretch for the stock market. The S&P 500 tumbled more than 20%, pushing down the value of most stocks. That means there are a lot more compelling values these days.

One sector that seems ripe with value right now is the real estate investment trust (REIT) industry. Most REITs have tumbled more than 20% this year, pushing their valuations down even though their growth prospects remain compelling. Three REITs that stand out for their value propositions are Equity Residential (EQR 0.26%), Prologis (PLD 1.09%), and Invitation Homes (INVH 1.55%).

Growth at a compelling value

Shares of Equity Residential have fallen more than 20% this year. The residential REIT now trades at 20 times its forward funds from operations (FFO), down from more than 26 a few months ago. While that's not the cheapest valuation in the apartment REIT sector -- it's right around the industry average -- Equity Residential has the highest projected FFO growth rate. Analysts expect it to grow by 11% over the next year, above the sector's 9% average. That makes it look like a fantastic bargain these days.

Two factors are driving Equity Residential's sector-leading growth. First, apartments in major coastal cities -- Equity's focus -- are still recovering from the pandemic. That means rents in those cities could grow faster in the near term. Meanwhile, the company is in the midst of a market expansion strategy to select cities in the south where rents are increasing rapidly due to continued population migration. These two drivers should enable Equity Residential to deliver outsized growth over the next year. Meanwhile, with its stock price falling, its dividend yield is up to 3.5%. That combination of growth and income makes Equity Residential look like a compelling value these days.

What slowdown?

Prologis' stock has tumbled over 25% this year. That has the leading industrial REIT trading for about 22.5 times its forward earnings. That's meaningfully cheaper than the roughly 30 times forward FFO rate it fetched a few months ago. It's a compelling price for a REIT that should deliver 10.5% FFO per share growth over the next year.

One factor weighing Prologis' stock is concerns that warehouse demand might slow if we head into a recession. The company isn't seeing a slowdown yet, as demand for its properties remains strong. Meanwhile, Prologis is well insulated from a potential downturn because most of its leases are significantly below market rates, so its earnings should continue growing as leases roll over to the much higher market rates. Add in its needle-moving deal for its largest rival and its now 2.6%-yielding dividend following the slide in its stock price, and Prologis looks like a bargain these days. 

These rental properties remain red hot

Invitation Homes' stock price has tumbled more than 20% this year. As a result, the REIT, which focuses on single-family rental homes, has seen its forward FFO ratio fall from around 26 times to 20 times. That's a dirt cheap price for a REIT growing as fast as Invitation Homes, with analysts expecting more than 11% FFO per share growth in the coming year.

The primary factor driving its growth is the demand for single-family rental homes. With home prices surging and mortgage rates rising, it's getting too expensive for many people to afford to buy a home, so they're continuing to rent, with many seeking to lease a single-family home because it offers more space than an apartment. That rising demand is driving up rental rates, boosting Invitation Homes' bottom line. Meanwhile, the REIT is scooping up as many homes as possible, including partnering with home builders to provide a pipeline of homes to purchase. That growth, combined with Invitation Homes' now higher dividend yield of 2.5%, makes it look like a great buy these days.

Great bargain buys

The sell-off in the REIT sector has many looking like bargains. Three standouts are Equity Residential, Prologis, and Invitation Homes, which trade at much cheaper valuations, especially given their growth prospects. Add in their higher-yielding dividends, and these stocks look like exceptional value buys right now.