Humber/Ontario Real Estate Course 4 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 4 Exam. Test your knowledge with quizzes and gain valuable insights into real estate concepts, regulations, and practices essential for your success in the industry.

Practice this question and more.

For which reason might a seller's market develop?

Decrease in mortgage rates.
Increase in unemployment rates.
Large surge in housing supply.
Rapid population decline.
Economic recession.
Numerous mortgage foreclosures.

The correct answer is: Decrease in mortgage rates.

A seller's market develops primarily when demand for homes exceeds supply, driving up prices and giving sellers the upper hand in negotiations. A decrease in mortgage rates makes borrowing more affordable for potential buyers. When interest rates drop, more buyers may enter the market, leading to increased competition for available homes. This heightened demand, coupled with potentially limited housing supply, creates conditions ripe for a seller's market where sellers can command higher prices and enjoy more favorable negotiating conditions. In contrast, increases in unemployment, surges in housing supply, rapid population declines, economic recessions, and numerous mortgage foreclosures typically result in weakened buyer demand or increased availability of homes, thus contributing to a buyer's market where prices may stagnate or decrease.