PMI: General Home Price Dip Unlikely

The likelihood of a general decline in home prices over the next two years remains "relatively low," according to the PMI Risk Index.The average value of the index for the 50 largest metropolitan statistical areas stood at 155 as of June, indicating that the MSAs had an average probability of 15.5% of undergoing a home price decline within two years, said PMI Mortgage Insurance Co., Walnut Creek, Calif. However, PMI analysts cautioned that, despite their view on a general home price decline, they think "the robust home price appreciation rates of the past will moderate, and outright home price declines could occur in a number of MSAs." MSAs deemed especially vulnerable to home price declines by the analysts are high-tech centers such as the San Francisco Bay area, parts of the Northwest, and parts of Texas and Colorado. A report on economic and real estate trends that contains the index scores can be found online at http://www.pmigroup.com/lenders/eret.html.