Industry News

California, Florida at highest risk for home-price drops

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Cities in California and Florida dominate a list of areas where a private mortgage insurer expects home prices are the most likely to decline in the next two years. Eleven of the 15 metropolitan statistical areas (MSAs) facing a 50 percent or greater chance of a price decline are in those two states, according to PMI Mortgage Insurance Co.'s latest Market Risk Index. MSAs in Texas, Ohio, Indiana and Pennsylvania were among those with the lowest risk of price declines, PMI said, with less than a 10 percent chance of lower prices in the next two years. PMI said it has changed the way it calculates the index, giving additional weight to recent price volatility and taking into account the use of adjustable-rate mortgages. The index also looks at trends in appreciation, unemployment, interest rates and affordability. The list of top 50 MSAs was also updated to reflect demographic changes, with Memphis, Tenn., and New Orleans, La., removed to make room for two Florida MSAs, Jacksonville a...