"It's not a great sign for the financial sector contributing to purchasing apartments because there's no sense of urgency to buy," said Johnson. "Rentals are a much shorter commitment."

Renters outnumber homeowners in the country's largest cities including New York, Los Angeles and Chicago. More than 77 percent of Manhattan's occupied units were rented in the decade ended 2010, compared with nearly 23 that were owned, data from the Census Bureau showed.

Nationally, the home ownership rate fell 1.1 percent to 65.1 percent from 2000 to 2010, the largest decrease since the Great Depression, according to the U.S. Census Bureau. Falling home prices have discouraged some homebuyers.

The S&P/Case-Shiller index of property values in 20 cities fell 4 percent in December from a year earlier. Values are down 34 percent from a July 2006 peak.

Low vacancy rates and rents that are likely to continue climbing this year have made apartments the "darling" of commercial real estate, according to Ryan Severino, economist at research firm Reis Inc.

Apartment Indices

The Bloomberg REIT Apartment Index of 16 publicly traded landlords returned 10 percent in the past year, including reinvested dividends, compared with returns of 6.8 percent for the Bloomberg REIT Index and 5.2 percent for the Standard & Poor's 500 Index. Equity Residential, the largest U.S. apartment REIT, returned 11.2 percent in the past year, according to data compiled by Bloomberg, and UDR gained 10.8 percent.

Toomey said in August that the REIT planned to invest as much as $1.8 billion in Manhattan apartment buildings. Its most recent purchase, about 700 apartment units at Columbus Square on the Upper West Side, was a joint venture with MetLife Inc., the biggest U.S. life insurer.

They partly funded the purchase with $302.3 million of 10- year fixed- and floating-rate debt from Fannie Mae, the government-supported mortgage company, UDR said in a statement last month. The loans pay 3.8 percent interest.

That compares with a rate of 4.85 percent for a 30-year jumbo mortgage to an individual in New York and 4.73 percent nationally, according to Bankrate.com data. For conforming Freddie Mac loans, rates are 3.95 percent, after falling to 3.87 percent this month, the lowest in records dating to 1971.