According to mortgage insurer PMI Group, residential property prices may fall in more than half of the largest US cities through to the first quarter of 2011 as unemployment and foreclosures rise.

Thirty of the 50 biggest metropolitan areas in the US have at least a 75% chance of lower prices through to March 2011. The decline is likely to spread to ‘all regions of the nation’ from California, Florida, Nevada and Arizona, the states most affected by the housing slump.

Unemployment rose to 9.5% in June, bringing the total number of jobs lost to 6.5 million since December 2007, according to the Labor Department. Real estate data service RealtyTrac Inc believes that foreclosure filings may hit a record 1.8 million in the first half of the year as more jobless homeowners default on their loans.

Home prices in 20 major US metropolitan areas dropped -18.1% in April from a year earlier, following an -18.7% in March, according to the S&P/Case-Shiller index. Prices are forecast to fall -41.7% from their peak, according to Deutsche Bank AG analysts.