Industry News

Risk of home-price declines increases

Latest index shows 32.8% chance of price declines in next two years

Rapidly slowing home-price appreciation and declining affordability contributed to a marked increase in the risk of home price declines in cities across the country, according to a report released today. According to PMI Mortgage Insurance Co.'s latest risk index, there's a 32.8 percent chance that home prices will decline in the next two years. Risk index scores increased for all of the nation's 50 largest metropolitan areas and 18 of these metros face a greater than 50 percent chance that home prices will decline, up from 13 last quarter. "No one should be surprised by the slowdown we're seeing," said Mark 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. But there are tried and true strategies for surviving the changing market. For companies, those with nationally diversified portfolios should be in good shape to weather the changes we're seeing. For individuals, it's i...

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