Falling home prices any be moderating, but they are not likely to be heading higher anytime soon. That’s according to mortgage insurer PMI Group ((PMI).
One of the the largest mortgage insurers in the US, PMI is forecasting that home prices will be lower in 2011 than they are today, including 30 of the 50 largest metro areas. The decline is likely to spread to “all regions of the nation” from California, Florida, Nevada and Arizona, the states most affected by the housing slump.
This line really grabbed me: “The 15 areas with the highest probability of lower prices in 2011 each have a 99 percent chance.”
“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
U.S. Home Prices to Fall Through 2011’s First Quarter
Bloomberg, July 7 2009
PMI Risk Index Shows US Home Prices Likely Lower In 2 Years
Kerry Grace Benn,
Dow Jones Newswires, JULY 7, 2009