PMI: Risk of Home Price Declines Rising

The risk of home price declines in the nation's 50 largest housing markets has been "significantly heightened" by rising foreclosures and unemployment, according to PMI Mortgage Insurance Co., Walnut Creek, Calif. According to the PMI U.S. Market Risk Index for Fall 2008, the risk of price declines rose by more than 10% in 16 of the nation's top 50 metropolitan statistical areas, primarily in areas that experienced major house price increases during the housing boom. "The risk of future home price declines increased in 94% of all 381 MSAa in the country this quarter," said David W. Berson, chief economist and strategist for The PMI Group. "The majority of these increases aren't statistically significant -- in many cases, risk increased by less than 10% -- but risk did increase by a significant amount, as much as 30% or more, in some states and MSAs where foreclosures and unemployment increased significantly." PMI can be found online at http://www.pmigroup.com.