On Friday, housing and census reports are likely to add to a snowballing consensus that housing is rebounding. A vigorous recovery would be manna for the economy. Home sales spur purchases of fridges and lawn mowers, and rising prices make consumers wealthier and heal bank balance sheets. But investors should brace for a plot twist…there are still too many houses on the market — 9.4 months’ worth of existing homes for sale in July, according to NAR data. The backlog is usually closer to six.Nearly seven million housing units will eventually enter foreclosure, mortgage-backed-securities strategists at Amherst Securities Group, a brokerage firm that deals in MBS, estimated on Wednesday. That could add 1.35 years’ worth of inventory to the market.
By Mark Gonggloff, Sept. 24, 2009, WSJ

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