PMI Risk Report

PMI Second Quarter 2009 Risk Index Reflects Brunt of Recession on Nation's Housing Markets

WALNUT CREEK, Calif., July 7 /PRNewswire-FirstCall/ -- PMI Mortgage Insurance Co., (NYSE: PMI), today released its Second Quarter 2009 Economic and Real Estate Trends Report, and its widely cited U.S. Market Risk Index(SM). The quarterly report projects the likelihood that the nation's housing prices will be lower in two years. As many as 324 - approximately 85% - of the nation's 381 MSAs (Metropolitan Statistical Areas) are now facing increased risk of lower home prices in 2011. Florida, California, Nevada and Arizona continue to have the highest risk scores - 36 of the most risky MSAs are located in these four states - but an increased risk of lower future prices is now spreading across all regions of the nation, due to the significant increases in unemployment and foreclosure rates.

Among the nation's fifty most populous MSAs, 28 of the Top 50 are now in the highest risk category, signifying the greatest probability of lower house prices by the first quarter of 2011, relative to the first quarter of 2009. Although the Risk Index does not measure the magnitude of declines, the forecast remains consistent with the outlook for moderating price declines in some of the largest MSAs for the remainder of 2009 and into 2010.

"Rapidly rising foreclosure and unemployment rates, continuing declines in house prices, and weakening consumer demand all worked to increase risk in the general economy, and the housing market specifically," said David Berson, PMI's Chief Economist and Strategist.

PMI's U.S. Market Risk Index(SM) ranks the nation's 50 largest metropolitan statistical areas (MSAs) and uses economic, housing, and mortgage market factors (home price appreciation, employment, affordability, excess housing supply, interest rates, and foreclosure activity).
Risk scores translate directly into a probability (ranging from zero to 100) that the price of homes in a given MSA will on average be lower at the end of the next two years.
A complete copy of the PMI Second Quarter 2009 Economic and Real Estate Trends(SM) (ERET) report and Appendix that provides data for all 381 U.S. MSAs is available at: http://www.pmi-us.com/econ.

10 Riskiest of the 50 Largest MSAs
High Riverside-San Bernardino-Ontario, CA 99.9 114.95
High Miami-Miami Beach-Kendall, FL 99.9 115.90
High Los Angeles-Long Beach-Glendale, CA 99.9 113.65
High Fort Lauderdale-Pompano Beach-
Deerfield Beach, FL 99.9 122.03
High Las Vegas-Paradise, NV 99.9 160.34
High West Palm Beach-Boca Raton-
Boynton Beach, FL 99.9 134.18
High Orlando-Kissimmee, FL 99.9 127.06
High Tampa-St. Petersburg-Clearwater, FL 99.9 126.57
High Santa Ana-Anaheim-Irvine, CA 99.9 114.12
High Phoenix-Mesa-Scottsdale, AZ 99.9 134.59

The report for our area...WPB/Boynton/Boca, indicates that there is a 99.9% chance that home prices will be lower here in two years than they are today.

If you'd like to discuss how this forecast may affect your plans to sell or buy, please give us a call on our direct line at 561-602-1258 or send us an email.
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