The construction of rental apartments is at its highest level in 25 years, according Freddie Mac's Vice President and Chief Economist Frank Nothaft. But the good news is, these units are getting rented, with absorption at its fastest pace in a decade.

Freddie attributes these absorption rates to the decline in the overall U.S. home ownership rate, which fell to 64.7 percent in the second quarter of 2014. That was the lowest mark since 1995. As home ownership falls, apartment vacancies have also dropped to their lowest level in 14 years.

Here's more market commentary from Nothaft: