The risk of price declines over the next two years has increased in the nation's 50 largest housing markets, according to the latest PMI U.S. Market Risk Index, whose median risk index value rose 11.6% in the third quarter.PMI Mortgage Insurance Co., the Walnut Creek, Calif.-based mortgage insurer that created the index, said the median value increased from 120 to 134, which means the probability of experiencing a home price decline in the next two years has risen from 12.0% to 13.4% in the 50 largest housing markets. "House prices are sticky, so moving to another phase in the real estate cycle can be a slow process," said Mark Milner, chief risk officer of PMI Mortgage Insurance. "But we believe that over the medium to long term, prices will move into better alignment with local economic factors -- in particular, income." According to the index, markets with a greater than 50% chance of price declines over two years are Boston-Quincy (Mass.), at 551; San Diego-Carlsbad-San Marcos (Calif.), at 536; Nassau-Suffolk (N.Y.), at 532; Santa Ana-Anaheim-Irvine (Calif.), at 522; and Oakland-Fremont-Hayward (Calif.), at 502. PMI can be found online at http://www.pmigroup.com.

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