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usatoday.com article on housing talks about a PMI Mortgage Insurance survey that finds that certain housing markets are facing a better that 50% chance of a decline in prices over the next two years. The survey found that home prices are sharply rising which has outpaced income gains and rental price increases. This makes homes less affordable and heightens the chances of a price correction. These are the key findings from the survey for the next two year:
• The risk of price declines — based on an analysis of prices, employment conditions and affordability — has increased in 36 of the nation's 50 largest housing markets since PMI's last study, released in the spring.
• The number of markets with a 50%-plus chance of a price drop has jumped from two to six.
• There is a 21.3% chance of a nationwide house-price drop, up from 20.2%.
• The highest-risk sites remain in coastal areas, with the biggest odds of falling prices in Boston (55.3% ) and Long Island (Nassau-Suffolk), N.Y. (54.0%). Six of the 10 highest-risk areas are in California.
• The risks are also rising in the suburbs of hot coastal cities, as well as non-coastal markets.