Rising foreclosures and unemployment have increased the risk of future home price declines in many areas of the U.S., according to PMI Mortgage Insurance Company’s Fall 2008 U.S. Market Risk Index.
The risk of future price declines rose in 94 percent of all 381 metro areas surveyed this quarter. The risk also increased by more than 10 percent in 16 of the nation’s top 50 metro areas, primarily in locations that experienced major increases in house prices during the housing boom. Only two metro areas — Farmington, Mass. and Boston — saw their risk decrease by more than one percent.
The following cities had the highest risk of future price declines:
1. Fort Lauderdale, Fla.
2. Riverside, Calif.
3. Orlando, Fla.
5. Tampa-St. Petersburg, Fla.
The following areas have the lowest risk of price declines, of less than 1 percent:
1. Fort Worth-Arlington, Texas
2. Dallas-Plano-Irving, Texas
5. San Antonio
The index also finds that housing affordability continues to be an issue in many areas of the country, with 40 percent of the 381 metro areas showing increased affordability while 60 percent had declines in affordability.