In a new report released from PMI Mortgage Insurance Co. it is projected that 60% of the top 50 metropolitan statistical areas (MSAs) have a greater than 50% probability of lower home prices in the first quarter of 2011.
According to PMI, as many as 324 of the nation’s 381 MSAs now face increased risk of lower home prices in 2011. Florida, California, Nevada and Arizona continue to have the highest risk scores – 36 of the most risky MSAs are located in these four states – but the risk is now spreading across all regions of the nation, due to the increases in unemployment and foreclosure rates.
“Rapidly rising foreclosure and unemployment rates, continuing declines in house prices and weakening consumer demand all worked to increase risk in the general economy, and the housing market, specifically,” says David Berson, PMI’s chief economist and strategist. “As a result of the continued weakness in prices, and the relatively low level of interest rates, improvements in affordability across the nation’s MSAs will continue to incentivize repeat and first-time home buyers back into the market.”