The U.S. housing market – once seen as the savior of the economic recovery – has now come under intense scrutiny. Some experts are ringing the alarm bells that ultra low interest rates championed by the Fed could result in the next housing bubble. David Stockman, President Reagan’s OMB director, believes the U.S. is already in the middle of a new housing crisis due to artificially low rates and speculation. Former FDIC Chairwoman Sheila Bair told The Daily Ticker earlier this month that low rates were actually discouraging banks from lending and, in turn, hindering economic growth.

Related: The Recovery in Housing Is Behind Us: David Rosenberg

Now government regulators are expressing apprehension over the meteoric rise in mortgage REITs. According to The Wall Street Journal, mortgage real-estate investment trusts “have been selling shares to the public at a rapid clip over the past three years” and “assets held by mortgage REITs are increasing from $159 billion in 2009 to $450 billion as of the end of last year.”

Related: Future of the Housing Market Is'A Great Unknown': Robert Shiller

Steve Rosenberg, founder and CEO of Greystone, a real estate lender and private investment group, says the housing investment environment has changed since 2008. Government agencies such as the U.S. Department of Housing and Urban Development (HUD), Fannie Mae and Freddie Mac had become the primary lenders for long-term mortgages after the housing crash (Rosenberg’s firm is the nation’s largest originator of multi-family home loans insured by HUD). Wall Street has returned with a vengeance and the lending market has become more “aggressive,” as individual and institutional borrowers actively trade multi-family properties. Individual investors purchased 19% of existing homes for sale in March, down from 22% in February, reports the National Association of Realtors.

Sales of multi-family homes are largely responsible for the boom in the housing market. Construction of these units nationwide is near its pre-recession peak. The decision by young working adults to live at home a bit longer or rent apartments has lowered vacancy rates and driven rental prices higher. This well-documented trend has dramatically dragged down the homeownership rate. According to the Census Bureau, the ownership rate stood at 65.6% in the third quarter of 2012, down from 69.2% at the end of 2004.

“Multi-family homes are a huge driver in the housing market,” Rosenberg says. Default rates for single-family homes are higher than multi-family properties, he explains, and government agencies in charge of underwriting multi-family mortgages are being “very responsible.”