Humber/Ontario Real Estate Course 3 Exam Practice

Which scenario would most benefit a seller in a real estate market?

1. Lower mortgage rates

2. Closure of a major nearby factory

3. Rising unemployment rates

4. Increase in similar home listings

5. Significant increases in property taxes

6. Deterioration of community facilities

The correct answer is: Lower mortgage rates

In a real estate market, lower mortgage rates tend to create a more favorable environment for sellers. When mortgage rates decrease, it typically leads to increased affordability for potential buyers. This reduction makes it less expensive for buyers to finance a home, which can increase demand in the housing market. Higher demand often results in more competitive offers, potentially driving up the sale price of homes. In contrast, scenarios like the closure of a major nearby factory or rising unemployment rates can negatively impact the local economy, leading to decreased demand for homes. Similarly, an increase in similar home listings may saturate the market, resulting in more competition among sellers and possibly lower sale prices. Significant increases in property taxes can deter buyers due to higher ongoing costs, while deterioration of community facilities can affect the overall desirability of a neighborhood. Therefore, lower mortgage rates stand out as the option that most effectively enhances conditions for sellers.