WALNUT CREEK, Calif., July 1 CA-PMI-Home-Price-Gro
In the news release, PMI Summer 2008 Risk Index Indicates Risk
Intensifying in Areas With Previous Rapid Home Price Growth, issued Tuesday,
July 1, by PMI Mortgage Insurance Co. over PR Newswire, we are advised by the
company that the tenth line item, "Portland-Vancouver-Beaverton; OR-WA,"
should have been the twenty-fifth line item with a rank of 5 as opposed to 1,
and the score of 8.2 rather than 79.7.
The complete, corrected release follows:
PMI Summer 2008 Risk Index Indicates Risk Intensifying in Areas With Previous
Rapid Home Price Growth
Housing Affordability Continues to Improve
WALNUT CREEK, Calif., July 1 /PRNewswire-FirstCall/ -- PMI Mortgage
Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc. (NYSE: PMI),
today released its Summer 2008 U.S. Market Risk Index(SM), which ranks the
nation's 50 largest metropolitan statistical areas (MSAs) according to the
likelihood that home prices will be lower in two years. The U.S. Market Risk
Index shows risk further diverged along two distinctly different paths during
the first quarter of 2008, continuing a trend that began in the fourth quarter
of 2007. In general, risk continued to intensify in many of the MSAs where
home price growth had significantly exceeded historical norms during the
housing boom, but continued to decline in many other areas across the country.
A complete copy of the Summer 2008 PMI ERET report and an appendix that
provides data for all 381 U.S. MSAs is available at:
http://www.pmi-us.com/eret.
The highest risk of future price declines remains in
Riverside-San Bernardino-Ontario, CA (95.5), followed by
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (92.2), and West Palm
Beach-Boca Raton-Boynton Beach, FL (91.9). The areas with the lowest risk of
price declines are in Fort Worth-Arlington, TX, Dallas-Plano-Irving, TX, and
Pittsburgh, PA, each at less than a 1 percent chance.
The risk of lower prices in two years declined in 35 of the nation's 50
largest MSAs, and among all 381 MSAs, 326 experienced a decline in risk.
Among the top 50 MSAs, 16 ranked in the two highest risk categories, and among
those, 15 were in California, Florida, Nevada, and Arizona. Risk of lower
prices in two years is greater than 50 percent in all of these MSAs.
Risk scores translate directly into an estimated percentage risk that home
prices will be lower in two years. The Summer 2008 Risk Index is based on
first-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.
"Compared with a year earlier, there has been a significant increase in
the number of existing single-family homes for sale relative to the number of
buyers, even beyond the normal increase in the spring home sales season.
April's ratio is the highest since 1985," said David Berson, PMI's Chief
Economist and Strategist. "Given the magnitude of the inventory overhang, we
expect national home price declines to continue into at least 2009."
Housing affordability continued to improve during the first quarter,
according to PMI's proprietary Affordability Index(SM), which measures how
affordable homes are today in a given MSA relative to a baseline of 1995. An
Affordability Index score exceeding 100 indicates that homes have become more
affordable while a score below 100 means they are less affordable. Across the
nation, 69.3 percent of the nation's 381 MSAs showed increased affordability;
while 30.7 percent of all MSAs experienced declines in affordability.
Affordability remains challenged in the 17 MSAs with risk scores in the two
highest risk ranks. Home prices in these areas will need to fall further in
order to move back in line with incomes before there will be meaningful
reductions in risk scores.
In addition to the PMI U.S. Market Risk Index showing the risk of price
declines, PMI's Summer 2008 Economic and Real Estate Trends(SM) (ERET) also
examines the accelerated decline of national home prices in the first quarter
of 2008.
Summer 2008 PMI U.S. Market Risk Index
Rank MSAScore
1 Riverside-San Bernardino-Ontario; CA95.5
1 Fort Lauderdale-Pompano Beach-Deerfield Beach; FL 92.2
1 West Palm Beach-Boca Raton-Boynton Beach; FL91.9
1 Orlando-Kissimmee; FL 91.1
1 Las Vegas-Paradise; NV 88.1
1 Tampa-St. Petersburg-Clearwater; FL 86.6
1 Santa Ana-Anaheim-Irvine; CA85.8
1 Los Angeles-Long Beach-Glendale; CA 85.7
1 Miami-Miami Beach-Kendall; FL 84.8
1 Sacramento-Arden-Arcade-Roseville; CA 82.2
1 Phoenix-Mesa-Scottsdale; AZ 79.6
1 San Diego-Carlsbad-San Marcos; CA 78.0
1 Jacksonville; FL73.2
1 Oakland-Fremont-Hayward; CA 72.8
2 San Jose-Sunnyvale-Santa Clara; CA 51.3
2 Providence-New Bedford-Fall River; RI-MA43.4
3 San Francisco-San Mateo-Redwood City; CA35.7
3 Washington-Arlington-Alexandria; DC-VA-MD-WV21.4
3 Nassau-Suffolk; NY 21.2
4 Edison-New Brunswick; NJ16.2
4 Virginia Beach-Norfolk-Newport News; VA-NC 13.8
4 Boston-Quincy; MA 11.8
4 Detroit-Livonia-Dearborn; MI11.1
5 Minneapolis-St. Paul-Bloomington; MN-WI 8.2
5 Portland-Vancouver-Beaverton; OR-WA 8.2
5 Newark-Union; NJ-PA 6.5
5 New York-White Plains-Wayne; NY-NJ 6.0
5 Baltimore-Towson; MD 5.5
5 Warren-Troy-Farmington Hills; MI 5.3
5 Cambridge-Newton-Framingham; MA 4.3
5 Atlanta-Sandy Springs-Marietta; GA 2.0
5 Seattle-Bellevue-Everett; WA 1.7
5 Chicago-Naperville-Joliet; IL1.5
5 Philadelphia; PA 1.4
5 Nashville-Davidson--Murfreesboro--Franklin; TN 1.3
5 St. Louis; MO-IL 1.0
5 Milwaukee-Waukesha-West Allis; WI <1
5 Cleveland-Elyria-Mentor; OH <1
5 Austin-Round Rock; TX <1
5 Denver-Aurora; CO <1
5 Charlotte-Gastonia-Concord; NC-SC <1
5 Kansas City; MO-KS<1
5 Columbus; OH <1
5 Cincinnati-Middletown; OH-KY-IN <1
5 Indianapolis-Carmel; IN <1
5 San Antonio; TX <1
5 Houston-Sugar Land-Baytown; TX<1
5 Pittsburgh; PA<1
5 Dallas-Plano-Irving; TX <1
5 Fort Worth-Arlington; TX <1
About PMI's Economic & Real Estate Trends(SM) (ERET) and U.S. Market Risk
Index(SM)
The PMI Economic and Real Estate Trends (ERET) containing the US Market
Risk Index is published quarterly by PMI Mortgage Insurance Co., a subsidiary
of The PMI Group, Inc. (NYSE: PMI). The Risk Index is a proprietary
statistical model that measures geographic house price risk by predicting the
probability that home prices in the nation's 381 largest metropolitan
statistical areas (MSAs) and metropolitan statistical area divisions (MSADs)
(as measured by the House Price Index from the Office of Federal Housing
Enterprise Oversight (OFHEO)) will be lower in two years. The PMI U.S. Market
Risk Index is based on data including the OFHEO House Price Index, labor
market statistics from the Bureau of Labor Statistics, and the PMI
Affordability Index, which uses local per capita household income, home price
appreciation, and a blended mortgage rate to calculate the local share of
mortgage payment to income relative to its baseline year of 1995. The PMI
U.S. Market Risk Index scale ranges from one to 100 and translates to a
percentage. For example, a score of 50 indicates a 50 percent chance that
home prices will be lower in two years.
About PMI Mortgage Insurance Co.
PMI Mortgage Insurance Co. (PMI US), a subsidiary of The PMI Group, Inc.
(NYSE: PMI), provides residential mortgage insurance to mortgage lenders,
capital market participants, and investors throughout the United States. PMI
US is incorporated in Arizona, headquartered in Walnut Creek, CA, and licensed
in all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin
Islands. By mitigating default risk, residential mortgage insurance expands
home ownership opportunities and assists financial institutions in reducing
the capital they are required to hold against low down payment mortgages. PMI
US is rated A+ by Standard and Poor's, Aa2 by Moody's, and A+ by Fitch. For
more information: http://www.pmi-us.com.
Cautionary Statement: Statements in this press release that are not
historical facts or that relate to future plans, events or performance are
'forward-looking' statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include, but
are not limited to, PMI's U.S. Market Risk Index, Affordability Index, and any
related discussion, and statements relating to future economic and housing
market conditions. Forward-looking statements are subject to a number of risks
and uncertainties including, but not limited to, the following factors:
changes in economic conditions, economic recession or slowdowns, adverse
changes in consumer confidence, declining housing values, higher unemployment,
deteriorating borrower credit, changes in interest rates, or a combination of
these factors. Readers are cautioned that any statements with respect to
future economic and housing market conditions are based upon current economic
conditions and, therefore, are inherently uncertain and highly subject to the
changes in the factors enumerated above. Other risk and uncertainties are
discussed in the Company's filings with the Securities and Exchange
Commission, including our report on Form 10-K for the year ended December 31,
2007 and our Form 10-Q for the quarter ended March 31, 2008.
SOURCE PMI Mortgage Insurance Co.
