Company's analysis shows strong economic climate for potential
Philadelphia-area homebuyers
PHILADELPHIA, Oct. 20 /PRNewswire-FirstCall/ -- Even in the post-Katrina
economy, the Philadelphia housing market appears to be holding steady,
according to Mark Casale, senior vice president of capital markets for
Philadelphia-based Radian Group Inc. (NYSE: RDN), which, through its Radian
Guaranty Inc. subsidiary, provides mortgage insurance to the national housing
market.
Even amid consumer concerns of an impending national housing bubble, there
are many indicators that point to a strong housing market. Low mortgage
rates, coupled with a recent increase in Philadelphia-region home values,
suggest that the region is experiencing a new economic climate that could
still benefit potential homebuyers.
"The picture at a national level looks solid," said Casale on his weekly
KYW Newsradio commentary. The two factors that lead to bubbles, housing
prices and unemployment trends, appear steady on both the national and local
levels, he said. But in addition to his optimism, Casale points out that the
industry - consumers and lenders alike - needs to continuously monitor the
market in order to gain a clear assessment of a region's affordability and
overall health.
"Before we get too comfortable, there are about 20 regions in the country
that we're keeping an eye on. Regions where we [Radian] have seen the highest
price increases - places like California, Arizona and New York are more likely
to see prices come down in the next few years."
Even so, said Casale, so far, so good. "Our region [Philadelphia] is not
on the watch list."
With rising interest rates, will mortgage rates follow?
With the Federal Reserve's prime rate increase on Sept. 20, Casale said
that mortgage rates may rise in step, which would buck the recent trend. Over
the last several years, the Fed has consistently raised short-term interest
rates but mortgage rates had not followed along.
"This has been good news for homebuyers and homeowners looking to
refinance," said Casale.
"Now we are starting to see signs of mortgage rates rising, and there are
other signals that the housing market may be softening - slower sales, fewer
new housing starts and prices beginning to cool in some markets. Still, a 30-
year fixed rate mortgage remains under six percent - quite reasonable. This
means, on a $200,000 mortgage, typical in our region, the payment would be
about $1,200 per month."
Given the economic data that has been released so far, Casale maintains an
optimistic outlook on the Philadelphia housing market.
"Home prices in the Philadelphia region increased 17 percent in the last
year, and mortgage rates won't stay this low forever," he said. "Renters may
want to run the numbers, and see why it still may be a good time to buy a
house."
About Radian Guaranty Inc.
Radian Guaranty Inc. is the mortgage insurance subsidiary of Radian Group
Inc. (NYSE: RDN), a global credit enhancement company headquartered in
Philadelphia. Radian Guaranty provides risk management products and services
to mortgage lenders nationwide; these services increase opportunities for
people to buy homes with little or no downpayment, protect lenders from
default-related losses on residential first mortgages and facilitate the sale
of low-downpayment mortgages in the secondary market. Additional information
may be found at http://www.radian.biz.
SOURCE Radian Guaranty Inc.
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Related links:
http://www.radian.biz
CONTACT:
For investors: Mona Zeehandelaar of Radian,
+1-215-231-1674, mona.zeehandelaar@radian.biz; For the media:
Radian Corporate Communications, +1-888-NEWS-520,
media@radian.biz
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