More than 34% of the national housing stock is being rented and the percentage is climbing, according to Moody's Analytics.

Slow income growth coming out of the recession and a lack of savings for a down payment pushed rental demand higher. Vacancy rates, according to Moody's, dropped for all types of properties during 2011. But for multifamily units of five or more, vacancies plunged below 10.5% from a high of 12.5% at the beginning of 2010.

To meet the escalating demand, construction starts on multifamily properties averaged 221,000 multifamily units from February to April, up from an average of 67,000 at the end of 2009. Many of the construction crews laid off after the housing bust are migrating to multifamily projects, though unemployment in the sector remains difficult.

Multifamily properties escaped overbuilding in the boom, but now some fear a bubble may be forming. Moody's analysts said the fear is "misplaced."

"Acceleration in apartment construction exceeds that of single-family construction, but in the context of longer term trends apartment construction is not keeping up with households," Moody's said.

Still, rents are climbing. According to Property Portfolio Research, rents in the largest areas increased an average 5% from last year.

Research from Fannie Mae earlier in the year showed more than half of renters have to spend at least 30% of their monthly income on housing.

Moody's analysts suggested investors could profit from converting distressed borrowers into renters with the intent of selling the property once appreciation occurs. Bank of America (BAC) began such a pilot program last year.

"Very few new single-family units are being built, with even fewer being built with the intent to rent," Moody's said. "Conversions to rental units are the main way of adding to supply."