According to Freddie Mac's newly released U.S. Economic and Housing Market Outlook, home prices for the country rose 4.8% in the second quarter of this year. This and other numbers indicate a strengthening market, especially as 34 states (the largest number in years) posted gains in home prices from June 2011 to June 2012.

There are many who are convinced that there’s a huge number of shadow inventory that will threaten these HPI (Home Price Index) gains. CoreLogic says shadow inventory has fallen by 28% since January 2012, but others say there are still millions of underwater homes and foreclosures that were backlogged when the foreclosure investigations started.

But Freddie Mac isn’t concerned: “While the shadow inventory persists, there is an important difference in today’s market compared with those of recent years, and that’s the substantially reduced amount of excess vacant housing,” said Frank Nothaft, VP and chief economist for Freddie Mac.

Additionally, foreclosure filings have decreased 10% over the past year, and just in July had declined 3% from June.