Firm Sees High Default Rate in AZ

The high rate of residential foreclosures in Arizona is likely to continue as rising interest rates "cool briefly resurgent home price appreciation" in the Phoenix-Mesa metropolitan area, according to Foreclosures.com.Alexis McGee, president of the Sacramento, Calif.-based property investment advisory firm, said the market was nearly flat in the Phoenix-Mesa area in the first quarter, with price appreciation registering 3.4%. "We saw that move up to 6.8% year over year at the end of June," Ms. McGee said. "Then interest rates took off in July. That will knock home prices back down, and we expect defaults to increase again in coming months." Ms. McGee said many homeowners have been using their homes like ATM machines to pay off credit cards and buy expensive items like automobiles. "When rates go up and the price curve flattens out or declines, they find themselves trapped with more debt than they can handle," she said. The firm can be found on the Web at http://www.foreclosures.com.