PMI: Hot Housing Markets Cooling

Many of the nation's hottest housing markets are cooling, but the strength of the economy is balancing the risk of price declines in the nation's 50 largest housing markets, according to PMI Mortgage Insurance Co., Walnut Creek, Calif.The average score in the PMI U.S. Market Risk Index rose from 287 to 288 in the second quarter, the company reported. This means the company's estimate of the probability of experiencing a home price decline in the next two years has risen from 28.7% to 28.8% in the 50 largest metropolitan statistical areas. According to the index, there are now 13 markets with a greater than 50% chance of price declines over two years, down from 14 in the first quarter. "This quarter's data signals that in many areas the expansion of the housing balloon has slowed substantially," said Mark Milner, chief risk officer of PMI Mortgage Insurance. "The Risk Index also shows that slowing price appreciation is balanced by underlying economic strength. In the absence of an unexpected economic shock, this makes a gradual cooling of the market the most likely outcome." PMI can be found online at http://www.pmigroup.com.