PMI Risk Index Indicates Broader Risk Of Home Price Declines

Posted by Orb Staff on January 15, 2009 No Comments
Categories : Residential Mortgage

PMI Mortgage Insurance Co. has released its U.S. Market Risk Index, which shows that the risk of lower house prices two years from now increased broadly across the nation – rising in 369 of 381 – or 97% of – metropolitan statistical areas (MSAs).

PMI estimates that half of the nation's 50 largest MSAs have an elevated or high probability of seeing lower house prices by the end of the third-quarter 2010, relative to the third quarter of 2008. A growing number of MSAs in the industrial Midwest and along the East Coast show an increase in probability of lower home prices in two years.

‘The two primary drivers of increased risk scores across a broader segment of MSAs are the continued high level of foreclosures and rising unemployment,’ says David Berson, PMI's chief economist and strategist. ‘These factors will put additional upward pressure on risk, with increases in affordability and lower mortgage rates providing some offset.’

SOURCE: PMI Mortgage Insurance Co.

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