Mortgage Defaults Surge as Rising Rates Squeeze Homebuyers

Mortgage defaults have risen at fastest pace since 2009 as interest rates increase.

Lenders warn defaults will rise further over next 3 months as more fixed-rate deals expire.

Demand for new mortgages has fallen sharply as higher rates reduce buyers' borrowing power.

Average mortgage rates on 2-year fixes jumped from 5.33% in May to 6.86% in July.

Forecasts suggest mortgage rates will stay above 5% until late 2024, weighing on bank lending.