Industry News

Risk of house-price declines falling in many areas

Drop in PMI risk index does not indicate market has hit bottom

Declining home prices boosted affordability during the second quarter, reducing the risk of price declines in 28 of the 50 largest metropolitan areas, according to an analysis by PMI Mortgage Insurance Co. PMI said its U.S. Market Risk Index -- which takes into account economic factors like home-price appreciation and volatility, affordability and employment -- fell for the first time in 2 1/2 years during the second quarter. While that's an encouraging sign that housing markets are beginning to correct, it's not evidence that they've hit bottom. Scores in many areas remain elevated, and risk remains high nationwide, said Mark Milner, PMI's chief risk officer. "We have seen a significant slowdown in price appreciation nationwide, and appreciation has gone negative in some areas," Milner said. "That's improved affordability, which is being reflected in the risk scores. But risk is still high and it's way too early to say we're at an inflection point." The average risk score for the 5...