Humber/Ontario Real Estate Course 2 Exam Practice

When evaluating market conditions in Anycity, which statement is correct regarding demographic, economic, and interest rate factors?

1. If Anycity has a stable employment rate, it is typically an indicator of a seller's market.

2. If residential mortgage rates in Anycity are increasing, then typically housing affordability is improving.

3. If the family formation rate in Anycity is rising, that fact has little impact on the overall real estate market.

4. If Anycity unemployment rates have been rising over the past two years, then resulting personal financial hardship can dampen buyer demand.

The correct answer is: If Anycity unemployment rates have been rising over the past two years, then resulting personal financial hardship can dampen buyer demand.

Option D is correct because if Anycity's unemployment rates have been rising over the past two years, this indicates economic challenges for the residents. With higher unemployment rates, individuals may face personal financial hardship, which can lead to a decrease in their purchasing power and overall demand for real estate in the market. This situation would likely result in a buyer's market, where there are more properties available than there are buyers, leading to lower prices and longer time on the market for properties. Therefore, the rising unemployment rates affecting personal financial hardship can dampen buyer demand in Anycity's real estate market. Options A, B, and C are incorrect: A. Stable employment rates more commonly indicate a stable market rather than immediately signaling a seller's market. B. Increasing residential mortgage rates make housing less affordable, not more affordable. C. Rising family formation rates typically indicate increased demand for housing as families grow, which can have a significant impact on the real estate market in terms of supply and demand.