PMI Report: US Housing Prices to Continue Decline Until Third-Quarter 2010
According to a PMI Mortgage Insurance Co report, US. home prices, already down 23 percent from their July 2006 peak, will continue to fall until the third quarter of next year.
Ninety-seven percent of the 381 U.S. metropolitan areas surveyed are likely to have lower home prices in September 2010, according to the Walnut Creek, California-based insurer’s Market Risk Index, which assigns a score to every region based on the likelihood real estate values will be lower in two years.
“The two primary drivers of increased risk scores across a broader segment of MSAs are the continued high level of foreclosures and rising unemployment,” David Berson, PMI’s chief economist and strategist, said in a statement.
The three-year-old housing recession has spurred a credit crisis that’s making it harder for borrowers to qualify for home loans. With home values tumbling, homeowners who are unable to refinance or sell have pushed the U.S. foreclosure rate to a post-World War II high. The lending crunch has, in turn, made it more difficult for companies to pay their bills, driving the jobless rate to a 15-year high.
The 10 regions with the highest risk for lower home prices were in California, Florida and Nevada, PMI said.
The 10 with the lowest risk for lower real estate values were Denver; Indianapolis; Cleveland; Columbus, Ohio; Charlotte, North Carolina; San Antonio; Pittsburgh and three Texas metro areas: Houston, Fort Worth and Dallas, according to the survey.
Mortgage issuance declined 23 percent last year from 2007, according to the Washington-based Mortgage Bankers Association.
Home prices will fall another 15 percent, according to economists Michelle Meyer and Julia Coronado of Barclays Capital Inc. in New York.
Published on January 14, 2009
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