Rapidly slowing appreciation and declining affordability have produced "a marked increase" in the risk of home 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 288 to 328 in the third 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 28.8% to 32.8% in the 50 largest metropolitan statistical areas. According to the index, there are now 18 markets with a greater than 50% chance of price declines over two years, up from 13 in the second quarter. "No one should be surprised by the slowdown we're seeing," said Mark F. Milner, chief risk officer of PMI Mortgage Insurance. "Over the past five years home prices appreciated much faster than incomes, and that can't continue forever." PMI can be found online at http://www.pmigroup.com.

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