Many local businesses in Pleasanton, who were dependent on local residents employed in Middleburg, have been unable to pay the mortgage on the business properties they own. Mortgage rates in Middleburg have been steadily increasing over the past year and analysts expect them to continue increasing for some time. Many prospective homebuyers in the Pleasanton area, deterred by increased mortgage rates, have decided to purchase homes in other areas. There are so few houses in Pleasanton that the banks cannot realize an economy of scale, making mortgage rates unrealistic for most potential homeowners.
For years, Pleasanton was a commuter community to industries in Middleburg. The close of several factories in Middleburg has set in motion a wave of mortgage defaults: citizens of Pleasanton are foreclosing on their houses in significant numbers. Many of the mortgages were held by local banks, and these adversely affected banks have been under pressure from their boards to offset the banks' losses. One principal means to recoup these losses is for the banks to raise interest rates, including mortgage rates. If those owning property in Pleasanton continue to default on their mortgages, then the mortgage rates offered by these banks will continue to rise.
Which of the following, if true, best supports the conclusion that mortgage rates in Pleasanton will continue to increase?