Home prices are likely to continue their recent declines, due to largely to elevated foreclosures and rising unemployment rates, according to data released Wednesday by PMI Mortgage Insurance Co. The Walnut Creek, Calif.-based mortgage insurer released its Fall 2008 U.S. Market Risk Index, which ranks the 50 largest U.S. metropolitan areas according to the probability of home price decline within two years. PMI’s quarterly Economic Real Estate Trends report uses information from the Office of Federal Housing Enterprise Oversight/Federal Housing Finance Agency to rank the highest at-risk property values in real estate markets across the country, PMI said in a press statement. The risk of price declines increased more than 10 percent in 16 of the nation's largest metropolitan areas, PMI said. The only metro areas that showed a decrease in risk greater than one percent were Cambridge-Newton-Framingham and Boston-Quincy, both in Massachusetts. The largest increase in risk occurred in San Francisco-San Mateo-Redwood City, where risk of a price decline within the next two years is 71.6 percent, up from 25.7 percent in the Q2 report. “The majority of these increases aren’t statistically significant,” said PMI economist and strategist David Berson in a media statement. However, the increases were significant in states “where foreclosures and unemployment increased significantly.” Of the 50 areas ranked in the fall index, 24 had greater than 10 percent risk that home prices will decline. Of those 24 areas, 16 face a risk greater than 70 percent, including the Orlando, Miami, Las Vegas, Phoenix and San Francisco metropolitan areas. Another 15 of the 50 areas, including Denver, Memphis and Dallas, were rated with less than one percent risk of home price decline. The areas at the greatest risk of home price decline are Fort Lauderdale-Pompano Beach-Deerfield Beach and Riverside-San Bernardino-Ontario, both coming in at 99.5 percent risk of decline. PMI’s Affordability Index, which measures the present affordability of homes in a metropolitan area compared to a baseline set in 1995, also showed poor housing affordability despite price corrections that have already taken place. Of the nationwide 381 metropolitan areas studied for affordability, 40 percent showed an improvement. The majority, 60 percent, actually showed decreased affordability. To read PMI’s full Economic and Real Estate Trends report, visit http://www.pmi-us.com/eret. Editor's note: to contact the reporter on this story, email diana.golobay@housingwire.com.