CORRECTING and REPLACING PMI U.S. Market Risk Index Shows Hot Markets Continue to Cool, but Strong Economies Offset Price Deceleration

The corrected release reads:

PMI U.S. MARKET RISK INDEX SHOWS HOT MARKETS CONTINUE TO COOL, BUTSTRONG ECONOMIES OFFSET PRICE DECELERATION

Many of the nation's hottest housing markets are cooling, PMIMortgage Insurance Co., the primary subsidiary of The PMI Group, Inc.(NYSE:PMI), reported today, but the continuing strength of the economyis balancing the risk of price declines. According to the PMI U.S.Market Risk Index, the average risk score for the nation's 50 largestmetropolitan statistical areas (MSAs) increased one point from lastquarter, with 25 MSAs seeing increases and 20 seeing decreases. Apodcast summarizing the report is available athttp://qrelease.com/podcast/pmi/.

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

The U.S. Market Risk Index shows 13 MSAs continue to have riskscores above 500, meaning they face a 50 percent or greater risk ofhome price declines in the next two years. The average score for theriskiest markets was 573.

The average score for the top 50 MSAs increased to 288, a 70-pointincrease from a year ago. The biggest gains this quarter were notamong MSAs at the top of the list but those in the middle. Newark, NJand Miami, FL lead the pack with increases of 32 points each, bringingtheir Risk Index scores to 459 and 359, respectively.

While appreciation remains strong by historical standards, 34markets experienced decelerating home prices, led by Las Vegas, NVwhere appreciation slowed to 14.5 percent, down from 30.1 percent ayear ago. "We'd reached a point where prices had gotten too far awayfrom economic fundamentals," Milner explained. "A return to a morenormalized appreciation climate is a natural outcome." Whileappreciation is slowing in many markets, it is still positive in allof the nation's 50 largest markets. In half of the largest marketsappreciation remains in the double digits.

In addition to the PMI U.S. Market Risk Index showing the risk ofprice declines, PMI's Spring Economic and Real Estate Trends (ERET)examines continuing affordability challenges in the face of a slowingmarket.

Looking at historical home price appreciation, Ph.D. EconomistCharles A. Calhoun simulates future house price scenarios for fourmetropolitan areas, showing the range of possible outcomes and thelikelihood that they will occur. This research supports PMI's viewthat despite some near-term risk homeownership is generally a goodlong-term, slow and steady approach to building wealth.

A second article looks at the new 40- and 50-year mortgages andfinds that they carry lower monthly payments than traditionalmortgages but still help borrowers build equity and avoid paymentshocks, unlike some of the more risky products such as interest onlyand payment option loans.

"We continue to believe traditional mortgages are the best optionfor homeowners to protect their financial stability and home equity,"Milner said. "But with increasing affordability challenges exacerbatedby rising interest rates, many families cannot buy a home without anaffordability product. Forty- and 50-year mortgages help families getinto homes now and offer a safer alternative to interest only loansand payment option adjustable rate mortgages by eliminating the risksrelated to payment shock that are built into some products. While youbuild equity more slowly, you still build it. And we have seen thatbuilding equity and wealth through homeownership has served a lot ofpeople well."

According to PMI's Affordability Index, a proprietary index thatis one component of the U.S. Market Risk Index, affordabilitydecreased in more than half of the 50 largest MSAs in the firstquarter of 2006 as home prices continued to outstrip incomes. EightMSAs have Affordability Index scores below 70, a threshold below whichan area is particularly vulnerable to economic shock. With a score of59.36, Fort Lauderdale, FL is the least affordable area among the 50largest MSAs.

Of the top 50 MSAs all but four -- Detroit, MI, Warren, MI,Milwaukee, WI, and Cleveland, OH -- saw employment growth. Las Vegasled the nation in employment growth at 6.23 percent over the pastyear, followed closely by Phoenix, AZ at 6.02 percent.

Other U.S. Market Risk Index trends include:

-- Risk remains concentrated along the coasts. Of the 13 highest risk MSAs, eight are located in California and five are in the Northeast. San Diego, CA remains the riskiest area with a score of 599, or a 59.9 percent chance prices will decline within two years. Sacramento, CA joined the top five for the first time with a score of 585.

-- Six markets saw year-over-year appreciation above 20 percent, led by Phoenix at 31.1 percent, followed by Orlando, Fort Lauderdale, and Miami, all in FL, at 27.7 percent, 25.7 percent, and 24.7 percent, respectively. The Pacific census division, consisting of California, Oregon, and Washington, is the fastest appreciating division.

-- Among markets with the greatest risk of price declines, four have seen appreciation drop into the single digits. San Diego saw appreciation of 7.7 percent, Boston, MA, 5.7 percent, Providence, RI, 9.5 percent, and Cambridge, MA, 5.2 percent.

-- Of the 19 markets where affordability increased slightly due to slower price growth, five were in Texas and six were in the Midwest.

A complete copy of the latest PMI Economic and Real Estate Trendsreport, a podcast of results, and an appendix that provides MarketRisk Index data for all US MSAs is available athttp://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-publications.
San Diego-Carlsbad-San Warren-Troy-Farmington Hills,
Marcos, CA 599 MI (MSAD) 184
Nassau-Suffolk, NY (MSAD) 589 Orlando-Kissimmee, FL 179
Boston-Quincy, MA (MSAD) 588 Phoenix-Mesa-Scottsdale, AZ 175
Santa Ana-Anaheim-Irvine, CA Atlanta-Sandy Springs-
(MSAD) 588 Marietta, GA 165
Sacramento-Arden-Arcade-
Roseville, CA 585 Denver-Aurora, CO 149
Riverside-San Bernardino-
Ontario, CA 583 Philadelphia, PA (MSAD) 130
Oakland-Fremont-Hayward, CA Chicago-Naperville-Joliet, IL
(MSAD) 582 (MSAD) 127
Los Angeles-Long Beach-
Glendale, CA (MSAD) 575 St. Louis, MO-IL 112
Providence-New Bedford-Fall Seattle-Bellevue-Everett, WA
River, RI-MA 568 (MSAD) 109
San Francisco-San Mateo- Portland-Vancouver-Beaverton,
Redwood City, CA (MSAD) 560 OR-WA 108
San Jose-Sunnyvale-Santa Milwaukee-Waukesha-West Allis,
Clara, CA 559 WI 108
Cambridge-Newton-Framingham,
MA (MSAD) 537 Kansas City, MO-KS 101
Edison, NJ (MSAD) 536 Austin-Round Rock, TX 93
New York-White Plains-Wayne, Charlotte-Gastonia-Concord,
NY-NJ (MSAD) 498 NC-SC 87
Las Vegas-Paradise, NV 481 Houston-Sugar Land-Baytown, TX 83
Dallas-Plano-Irving, TX
Newark-Union, NJ-PA (MSAD) 459 (MSAD) 80
Fort Lauderdale-Pompano
Beach-Deerfield Beach, FL Nashville-Davidson-
(M 441 Murfreesboro, TN 71
Washington-Arlington-
Alexandria, DC-VA-MD-WV Fort Worth-Arlington, TX
(MSAD) 431 (MSAD) 69
Miami-Miami Beach-Kendall,
FL (MSAD) 359 Cleveland-Elyria-Mentor, OH 68
Minneapolis-St. Paul-
Bloomington, MN-WI 355 Columbus, OH 65
Detroit-Livonia-Dearborn, MI
(MSAD) 337 San Antonio, TX 65
Cincinnati-Middletown, OH-KY-
Baltimore-Towson, MD 307 IN 64
Tampa-St. Petersburg-
Clearwater, FL 294 Memphis, TN-MS-AR 61
Average 288 Indianapolis-Carmel, IN 58
Virginia Beach-Norfolk-
Newport News, VA-NC 278 Pittsburgh, PA 57

The PMI Market Risk Index is not tuned to evaluate the effect ofcatastrophic events such as Hurricane Katrina. As a result there is noscore for the New Orleans-Metairie-Kenner MSA this quarter.

About PMI's Economic & Real Estate Trends (ERET) and US MarketRisk Index

The PMI Economic and Real Estate Trends (ERET) containing the USMarket Risk Index is published quarterly by PMI Mortgage InsuranceCo., a subsidiary of The PMI Group, Inc. (NYSE:PMI). The Risk Index isa proprietary statistical model that measures geographic house-pricerisk by predicting the probability of a regional decline in homeprices in the nation's 50 largest metropolitan statistical areas(MSAs) and metropolitan statistical area divisions (MSADs) over thenext two years. The PMI US Market Risk Index is based on the HousePrice Index from the Office of Federal Housing Enterprise Oversight(OFHEO), labor market statistics from the Bureau of Labor Statistics,and the PMI affordability index, which uses local median householdincome, home price appreciation, and the price of a conventionalmortgage to calculate the local share of mortgage payment to incomerelative to its baseline year of 1995.

The PMI US Market Risk Index scale ranges from one to 1,000 andtranslates to a percentage. For example, a score of 100 indicates a10% chance of a decline in home prices over the next two years. Ahigher score indicates a higher likelihood of future home pricedeclines. The PMI Risk Index scale is linear. In other words, anincrease in risk index score of 100% (for example, from 100 to 200)indicates that the risk of home price decline has doubled. Conversely,a decline in risk index score by 50% (from 100 to 50) indicates thatthe risk of home price decline has declined by 50%. The AffordabilityIndex score is linear against a baseline of 100 in 1995. For example,an AI score of 85 means that the median home in that area is 15percent less affordable than it was in 1995.

About PMI Mortgage Insurance Co.

PMI Mortgage Insurance Co., a subsidiary of The PMI Group, Inc.(NYSE:PMI), is a leading U.S. residential mortgage insurer, licensedin all 50 states, the District of Columbia, and Puerto Rico. Privatemortgage insurance expands home ownership opportunities by enablingborrowers to buy homes with down payments of less than 20% andfacilitates the sale of low down payment mortgages in the mortgagecapital markets. PMI is incorporated in Arizona and headquartered inWalnut Creek, CA. For more information: www.pmigroup.com.

Cautionary Statement: Statements in this press release that arenot historical facts or that relate to future plans, events orperformance are 'forward-looking' statements within the meaning of thePrivate Securities Litigation Reform Act of 1995. Theseforward-looking statements include, but are not limited to, PMI's U.S.Market Risk Index and any related discussion, and statements relatingto the possible gradual cooling of the U.S. housing market as well asfuture economic and housing market conditions. Forward-lookingstatements are subject to a number of risks and uncertaintiesincluding but not limited to, the following factors: changes ineconomic conditions, economic recession or slowdowns, adverse changesin consumer confidence, declining housing values, higher unemployment,deteriorating borrower credit, changes in interest rates, the effectsof Hurricanes Katrina and Rita or other natural disasters, or acombination of these factors. Readers are cautioned that anystatements with respect to future economic and housing marketconditions are based upon current economic conditions and, therefore,are inherently uncertain and highly subject to the changes in thefactors enumerated above. Other risk and uncertainties are discussedin the Company's filings with the Securities and Exchange Commission,including our report on Form 10-K for the year ended December 31, 2005and Form 10-Q for the quarter ended March 31, 2006.