PMI Sees Broader Risk of Further Home Price Drops
January 14, 2009
A quarterly index that attempts to quantify the risk that housing prices will deteriorate over the next two years finds that the likelihood of further home value declines has broadened. The index, created by mortgage insurer PMI, shows the risk of price declines rose in 369 of the 381 metropolitan areas tracked in the survey. PMI estimates that half of the nation's 50 largest metropolitan areas have an "elevated or high" risk of seeing home prices fall further. And a growing number of cities in the industrial Midwest and the East Coast show an increase in the probability that home values will be lower in two years, PMI said. David Berson, PMI's chief economist and strategist, said that "the continued high level of foreclosures and rising unemployment" continue to put downward pressure on home values.
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