In the report, economist Joseph Brusuelas notes that the dwindling supply of housing is bullish for the continued recovery of the U.S. housing market. He writes:
Rising purchases of homes from cash buyers and investors reduced the monthly supply of existing homes on the market to 4.8 months in November from 6.4 months in January of 2012. Careful management of foreclosed properties by Fannie Mae, Freddie Mac and the large banks contributed to the improved supply picture in the housing market.
Brusuelas acknowledges that negative equity positions pose a continuing threat to the housing market, since those homeowners are unable to take advantage of refinancing at low mortgage rates.
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