A recently modified index that ranks metropolitan statistical areas based on the risk of declining home prices indicates that the risk has increased in 39 of the 50 largest MSAs, according to PMI Mortgage Insurance Co., Walnut Creek, Calif. PMI said its U.S. Market Risk Index now makes foreclosure rates and excess housing supply "more explicit components" of the model. The MSAs ranking highest on the index are Riverside, Calif., with a 94% chance that home prices will decline over the next two years; Las Vegas, with an 89% change; and Phoenix, with an 83% chance. "We're seeing an increasingly polarized market," said David W. Berson, chief economist and strategist for The PMI Group. "The risk that home prices will be lower in two years has increased for many of the largest cities in the nation, although areas that saw only moderate home price gains during the 2002 to 2005 period still generally have low risks of price declines." PMI can be found online at http://www.pmigroup.com.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry