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PMI sees less risk of price declines in most major markets

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Housing markets that didn't experience steep run-ups in prices during the housing boom are starting to show a reduced risk of price declines in the next two years, according to a risk index published by PMI Mortgage Insurance Co. The chance that housing prices will be lower in two years declined in 32 of the 50 largest U.S. housing markets during the fourth quarter, PMI said. That's an abrupt turnaround from the third quarter, when PMI said the risk of price declines increased in 39 of the 50 largest markets. But PMI's Spring 2008 U.S. Market Risk Index also showed a greater than 50 percent chance of price declines in 14 of the nation's 50 largest housing markets, up from 13 in the previous quarter. The index shows risk is beginning to "diverge along two distinctly different paths," PMI analysts said. Risks continue to increase in states where growth in house prices "significantly exceeded" historical norms during the housing boom, including markets...