Radian Releases Commentary on Regional and National Housing Market

Radian Releases Commentary on Regional and National Housing Market

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.

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

Web site: http://www.radian.biz/

NOTE TO EDITORS: This news release summarizes KYW Newsradio commentaries from Mark Casale, senior vice president of capital markets for Philadelphia- based Radian Group Inc., which aired Sept. 11, 18 and 25. Casale is available for interviews about these topics or other topics related to the housing market, credit enhancement and the mortgage industry. To speak with Casale, or for more information about Radian Group Inc., contact the Radian 24-hour media line at 888-NEWS-520.

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