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MIDDLETOWN — The local housing market's risk of continuing its downward spiral in value may be improving, according to a recent survey.

PMI Mortgage Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc., today released its Summer 2008 U.S. Market Risk Index, which ranks the nation's 50 largest metropolitan statistical areas according to the likelihood that home prices will be lower in the next two years.

According to the survey, the Cincinnati-Middletown area has a less than 1 percent chance of seeing lower housing prices in the future.

The highest risk of future price declines remains in Riverside-San Bernardino-Ontario, Calif., followed by Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., and West Palm Beach-Boca Raton-Boynton Beach, Fla.

Other areas with the low risk of price declines included Fort Worth-Arlington, Tex., Dallas-Plano-Irving, Tex., and Pittsburgh, Penn., each at less than a 1 percent chance.

The region can count itself lucky as the majority of the country has a greater than 50 percent chance of seeing lower housing prices in two years, according to the survey.

"Compared with a year earlier, there has been a significant increase in the number of existing single-family homes for sale relative to the number of buyers, even beyond the normal increase in the spring home sales season. April's ratio is the highest since 1985," said David Berson, PMI's chief economist and strategist. "Given the magnitude of the inventory overhang, we expect national home price declines to continue into at least 2009."

Risk scores were determined by an estimated percentage risk that home prices will be lower in two years. The Summer 2008 Risk Index is based on first-quarter Office of Federal Housing Enterprise Oversight data, PMI officials said.

In addition to housing prices, housing affordability continued to improve during the first quarter, according to PMI's proprietary Affordability Index, which measures how affordable homes are today in a given area relative to a baseline of 1995. An Affordability Index score exceeding 100 indicates that homes have become more affordable while a score below 100 means they are less affordable. Across the nation, 69.3 percent of the nation's 381 MSAs showed increased affordability, while 30.7 percent of all MSAs experienced declines in affordability.

A complete copy of the Summer 2008 PMI report for all 381 U.S. MSAs is available at www.pmi-us.com/eret.

PMI Summer 2008 PMI U.S. Market Risk Index

Contact this reporter at (513) 705-2843 or jlander@coxohio.com.