PMI Study Sees Widespread Risk of Price Declines.

Walnut Creek, CA -- Forty-eight of the 50 biggest metropolitan areas in the nation show signs of increasing risk for a decline in home prices, according to an analysis done by PMI Mortgage Insurance Co.

However, PMI says that because of the strength of the national economy, the formerly red-hot housing market will cool down slowly rather than go into a bust, absent any major economic shocks.

PMI's spring U.S. market risk index found that home price growth has slowed in nearly half of the metropolitan areas compared to the previous quarter.

The main cause of a higher risk for price declines is low affordability. With interest rates creeping up, the number of markets where affordability is stretched at today's housing prices has increased dramatically, PMI said.

According to PMI, 14 of the top 50 metropolitan areas face a 50% or greater risk of a home price decline, up from 11 last quarter.

Mark Milner, chief risk officer at PMI, said the biggest change affecting the risk of a price decline was affordability, with continued increases in home prices and higher interest rates making it more of a challenge for people to assemble the financing needed to purchase a home at today's prices. Affordability has decreased in all 50 of the largest metropolitan areas for the most recent quarter, PMI said. And eight ...