Newswire:
“The report said as many as 85% of the country’s 381 metropolitan areas are facing an increased risk of lower home prices in 2011, with Florida, California and Nevada continuing to be at the highest risk.
Among the country’s 50 most populated metro areas, the PMI study showed 28 to be in the highest risk category, signaling the greatest probability for lower house prices by the first quarter of 2011.
The credit crisis was set off after the housing bubble deflated and popped – and that crisis only reinforced an extremely difficult dynamic in the housing market.”
The charts below are not at all encouraging:
US Home Prices, 1890-2009
Real Home Prices, 1890-2009
Year-Over-Year Change Home Prices, 2001-2009
Sources: U.S. Home Prices to Fall Through 2011’s First Quarter Dan Levy Bloomberg, July 7 2009 http://www.bloomberg.com/apps/news?pid=20601103&sid=aEwbzPfaEGw8
PMI Risk Index Shows US Home Prices Likely Lower In 2 Years Kerry Grace Benn, Dow Jones Newswires, JULY 7, 2009 http://online.wsj.com/article/BT-CO-20090707-708983.html
Originally published at The Big Picture and reproduced here with the author’s permission.
Are we not going to discuss the fact that PMI Group has a vested interest in forecasting lower future home prices?My BS-meter sounds loudly at 99% probability forecasts.
Please explain. I thought that insuring the mortgage is different than insuring the house itself. Why would PMI have a vested interest in the value of the home being lower? How would a lower home value increase the premiums for mortgage insurance?
Could not agree more with PMI Group. The Median wage continues to be flat and mortgage lending standards are starting to come back. Add higher interest rates and there will really be blood in the water. Foreclosures in the Dallas/Fort Worth area are selling at 30%+ below current property tax appraisals. The D/FW area did not even have the hugh run up in prices like other areas. A residential dwelling is only worth the mortgage amount a buyer can qualify for.