In the vibrant downtown of Bethesda, Maryland, a short bike ride from the D.C. line, developers are readying to cut the ribbon on 162 rental units in what is being called the Flats at Bethesda Avenue. It is part of a new mixed-use development that includes high-end retail, restaurants and multimillion-dollar condominiums, all in the heart of the downtown, which has already undergone a revival in just the past five years.  The lowest price point at the Flats is $2,200 per month for a studio. The most expensive unit is $6,000 a month. The area, which saw little to no apartment construction during the recession, is now booming.  "We've had a surge here over the last nine or 10 months, and it's really taken off. People were concerned about oversupply, but the absorption has been great, and it's really across the board," said Douglas Firstenberg, principal of StonebridgeCarras, the real estate development and investment firm behind the project. "There is really a growth in demand in, the term we're using, 'rent by choice.' The older renter who is looking to downsize and doesn't want to own anymore."  Read MoreHomeowners deepest underwater: No relief in sight  Firstenberg estimates that more than half of those who have signed leases so far are over the age of 50. They want to be in the middle of an urban area. It is a phenomenon driving development of new urban cores outside major cities as well as new walkable developments in the nation's downtown areas. Still, it is not happening fast enough.  "There is no question we have a shortage of housing," added Firstenburg.  The supply issue will vary market to market and price range to price range. Some local municipalities require developers to set aside some units as "affordable," but the bulk of new renter households will likely be among lower-income families, and those units are not nearly enough.  "The thing to realize about this millennial generation is it's much more racially, ethnically diverse than the boomer generation, and that means less homeownership. The rate for African-Americans and Hispanics is lower than it is for whites by a considerable amount," said Goodman.  Rising rents are continuing to put a strain on U.S. households, making up a far larger monthly share of expenses. While multifamily construction last year soared to the highest level since 1989, the timeline for these buildings is longer than for a single-family home, and the rental population is growing ever faster.  Read MoreWhy aren't more homes being built?  Higher rents may drive some to homeownership, but only if renters can save enough for a down payment; that, too, is getting harder.  "Real wages have been absolutely flat for about the last 20 years and actually down for that critical 25-34 age group, student loan debt, particularly for those that don't finish school is really important, and then finally the question is, has there been a subtle change in attitudes toward homeownership?" asked Goodman.  —CNBC producer Stephanie Dhue contributed to this report.
America's rental apartments are full. Historically full, in fact. The national occupancy rate hit 95.3 percent in May, the highest on record.