PMI Risk Index Jumps
From Reuters:
From the PMI Group:
U.S. house price risk jumped in past year
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:
PMI U.S. Market Risk Index Shows Hot Markets Continue to Cool
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.
8 Comments:
Here is the PMI report:
Economic Real Estate Trends - Summer 2006 (PDF)
Thanks Grim for all the data that you pump out.
For those that don't know what the PMI Risk Index means:
The Market Risk Index represents the probability of a decline in housing prices in that area in the next two years. For example, a Risk Index of 200 means that there is a 20% chance of price declines in the next two years.
Nassau-Suffolk, NY: 58.9%
Edison, NJ: 53.6%
New York-White Plains-Wayne, NJ-NY: 49.8%
Newark-Union, NJ-PA: 45.9%
For those who are very new, those names represent statistical areas called MSAs (Metropolitan Statistical Areas). More information on MSAs can be found at Wikipedia:
United States metropolitan area
grim
From Reuters:
Toll cancellations higher than last qtr
Cancellation rates among U.S. home buyers are running above last quarter's levels as the housing market slows, the chief executive of luxury home builder Toll Brothers Inc. said on Tuesday.
"I think our cancellations are running higher than on the last call," Robert Toll said at the Reuters Real Estate Summit in New York.
Toll cited a perception among buyers, fueled partly by media coverage of the housing market, that homes are a depreciating asset. He also pointed to the supply of "speculative housing" as well as a national "malaise" caused by last autumn's hurricanes.
But he predicted buyers who sit out the current industry slowdown will regret their decision later, and said cancellation rates were likely to stabilize over the next six months.
"I think you're going to see a very strong housing market again," Toll said.
Grim,
The FOMC is meeting tomorrow. Marketplace.com has an article speculating on 50 BPS uptick. What do you make of it? Am I going to get a better CD in July?
anyone see the cover of USA today? All about housing and affordability but saying housing will still increase by 5% this year. I do not know how to link the article
The FOMC meeting is a two day meeting. While it begins tomorrow, we won't see a policy statement until Thursday afternoon.
There have been plenty of pieces speculating on a 50bp uptick since it was mentioned in the last set of minutes. Probability?
Fed Funds Rate Predictions
Looks like the probability of a 50 bips move is around 10% (as of yesterday). Probability of a 25 bips move roughly 90%.
Probability of another 25 bps move in August is around 60%.
grim
grim:
You know my verbal Joisey salute to Bobby Boy.
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