Affordability and declining foreclosure starts were responsible for the dramatic decrease in the overall risk of price declines according to PMI. In addition to affordability, lower home prices, lower mortgage interest rates and increasing personal income contributed to the risk reduction.
PMI stated it expects risk scores to continue to fall due to slowing (lower) unemployment rates 1st quarter 2010 and onward. This should prove to be "important new force in reducing the risk of lower prices." "House prices have dropped sharply relative to incomes in most areas suggesting that prices have fully, or more than fully, adjusted for their unsustainable increases during the housing boom," PMI Chief Economist David Berson said in a statement accompanying the report.
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