The real estate slump here and elsewhere is likely to worsen, given that most of the adjustable rate mortgages written in the last three years will be reset with higher interest rates, said Christopher F. Thornberg, an economist with Beacon Economics in Los Angeles. As a result, borrowers of an estimated $800 billion in loans will be forced in the next 12 months to 18 months to make bigger monthly payments, refinance or sell their homes.

A big reason the fallout is occurring faster here is a Georgia law that permits lenders to foreclose on properties more quickly than in other states. The problems include not just people losing their homes, but also sharp declines in property values, particularly in lower-income and working-class neighborhoods.

For example, a three-bedroom house near Turner Field, where the Atlanta Braves baseball team plays, fetched a high bid late last month of $134,000 at an auction by the bank that took possession of it. Almost three years ago, the new home was bought for $330,000.

While the surge in foreclosures in other big cities like Cleveland, New Orleans and Detroit can be attributed to local economic challenges, Atlanta more closely reflects the nation. Its unemployment rate, 4.9 percent in May, is low and close to the national average of 4.5 percent. And businesses here are adding jobs, albeit at a slower pace than they were last year.

Like others across the country, homeowners here took out aggressive mortgages in the last few years when interest rates were low and housing prices were soaring. Now many are falling behind — some have lost jobs or experienced other financial difficulties, but many others are not able to refinance because their homes are worth less than they paid for them and their credit is now too weak for them to qualify for another loan.

So far, the pain has been limited to those on the financial margins, but as more loans are reset to higher rates and home prices continue to slide, more homeowners will be unable to meet rising payments or to refinance. “This is a process that is starting low and will go high,” said Mr. Thornberg, the economist in Los Angeles.

Atlanta also serves as a microcosm for some broader national trends: wages have been stagnant for much of this decade, homeowners have taken on record amounts of debt, and mortgage fraud has been on the rise.

“We are a very affordable place,” said Mike Alexander, the chief of research at the Atlanta Regional Commission, an organization that serves local governments. “But our incomes are very low, and if anything went wrong, it would be very hard for people to maintain their homes.”

An estimated 2.7 percent of all housing units in the region were in foreclosure at the end of last year, up from 1.1 percent in 2000, according to an analysis by the commission. Nationally, less than 1 percent of all housing units were in foreclosure, according to data from the Mortgage Bankers Association and the Census Bureau.

Though Atlanta has added jobs in recent years, they pay less than the jobs the region lost after the technology boom of the late 1990s ended. The median household income was only 7.6 percent higher in 2005 than in 2000, according to the Census Bureau. That is about half the rate of inflation during that period, and it mirrors what has occurred nationally.

While wages have languished, average Atlanta families are shouldering more debt. As of March, residents had bigger credit card balances, mortgages and car loans relative to their income than average Americans, according to data compiled by Moody’s Economy.com. And the equity that Atlanta residents have in their homes — the value of their house minus what they owe — has dropped 14 percent since peaking in late 2005.

By comparison, in California — the state where mortgage lending was most aggressive, real estate prices climbed fastest and homeowners have the highest debt burdens — home equity values have dropped about 10 percent from their peak in 2005.

Georgia’s foreclosure laws have also accelerated a process that can drag on for months in legal proceedings in other states. Lenders can declare a borrower in default and reclaim a house in as little as 60 days.

“Because of the foreclosure laws, it may be that people go from delinquency into foreclosure much more quickly in Georgia,” said Mark Zandi, chief economist at Moody’s Economy.com.

That still would not explain why so many people fall behind on house payments in the first place.