Homes in about 30 percent of the top 50 U.S. house markets are at risk of losing value, up from about a fifth a year ago, according to an index prepared by mortgage insurer PMI Group Inc.
The average score of PMI’s U.S. Market Risk Index for the top 50 metropolitan statistical areas, or MSAs, leaped 70 points this quarter to 288 from the year-ago period, PMI said in a statement on Tuesday.
This suggests homeowners face a 28.8 percent chance that prices on their houses will drop within two years, PMI said.
On a quarter-over-quarter basis, the average risk score for the top 50 MSAs increased 1 point, with results increasing in 25 areas and declining in 20, PMI said. Newark, New Jersey, and Miami led increases in the index with 32 point jumps, to 459 and 359, respectively, PMI said.
From the PMI Group:
The U.S. Market Risk Index shows 13 MSAs continue to have risk scores above 500, meaning they face a 50 percent or greater risk of home price declines in the next two years. The average score for the riskiest markets was 573.
The average score for the top 50 MSAs increased to 288, a 70-point increase from a year ago. The biggest gains this quarter were not among MSAs at the top of the list but those in the middle. Newark, NJ and Miami, FL lead the pack with increases of 32 points each, bringing their Risk Index scores to 459 and 359, respectively.