The U.S. Market Risk Index shows that while some housing markets are cooling, the economy has cushioned the decline in home prices.

The report, released by PMI Mortgage Insurance Co. on Tuesday, reported an average risk score for the country's largest metro areas of 288 for the first quarter. The score was up one point from fourth quarter 2005 and up 70 points from the first quarter 2005.

Twenty-five metro areas experienced an increase in risk, while 20 areas had declining risks.

The index is based on data from the Office of Federal Housing Enterprise Oversight, the Bureau of Labor Statistics and the PMI affordability index. The index assigns the top 50 metro areas in the U.S. a risk score between one and 100.

The score shows the chance of home prices declining over the next two years. For example, a score of 100 represents a 10% chance of home prices falling in the area. Higher scores equal a greater risk of home-price declines.

"This quarter's data signals that in many areas, the expansion of the housing balloon has slowed substantially," said Mark Milner, chief risk officer of PMI Mortgage Insurance Co. "The Risk Index also shows that slowing price appreciation is balanced by underlying economic strength. In the absence of an unexpected economic shock, this makes a gradual cooling of the market the most likely outcome."

Thirteen metro areas had scores over 500, or greater than a 50% risk of home-price declines within the next two years. The area at the highest risk is the San Diego-Carlsbad-San Marcos, Calif. area. It had a rating of 599.

Newark, N.J. and Miami both experienced 32-point increases in risk for the quarter, with scores of 459 and 359.

When it comes to current slowdown, 34 markets experienced decelerating home prices over the past year. Las Vegas was at the top of the list, with an appreciation of only 14.5%. That is a significantly low number when compared to the 30.1% appreciation last year for Vegas.

Many believe that prices are simply leveling out from unrealistic highs.

"We'd reached a point where prices had gotten too far away from economic fundamentals," said Milner. "A return to a more normalized appreciation climate is a natural outcome."

The country's largest metro areas are still maintaining appreciation rates in the double digits, despite the reports of a wide-spread cooling.

According to the report, risk appears to be concentrated along the coasts. Eight of the top 13 high risk areas are located in California. Five of the areas are in the Northeast.

Affordability decreased in more than half of the largest metro areas. It increased slightly in 19 markets due to a slower price growth.