Increases in foreclosures and unemployment have significantly raised the risk that home prices in places like Florida, California and Nevada will fall even further during the next two years, according to the PMI Mortgage Insurance Co. However, it expects home values in the Philadelphia market – including Montgomery County PA, Lower Pottsgrove Township, and Sanatoga – to remain relatively stable.
PMI insures residential mortgages for mortgage lenders and investors throughout the United States. Its quarterly U.S. Market Risk Index, which looks at America’s Top 50 home markets and whether their prices will go up, go down, or remain the same, was issued Wednesday (Oct. 1, 2008). The index is based on an analysis of federal government data.
News for local homeowners was good: PMI reported home prices in Greater Philadelphia have only a 2.1-percent chance of falling during the next 24 months. News in Fort Lauderdale FL, Riverside CA, and Las Vegas NV was bad: PMI said owners there face a 98-percent-or-higher chance their homes will drop in price.
Living at the west end of Pennsylvania is least risky, PMI noted. In the Pittsburgh market, it said, home prices have a less-than-1-percent chance of falling.
The insurer also measures how affordable homes are, or aren’t, for prospective buyers. Overall home affodability, based on prices set in 1995, failed to improve during the quarter, PMI said.