Humber/Ontario Real Estate Course 2 Exam Practice

Which factor, assuming all other factors remain stable, can dampen buyer demand in Anycity if market conditions change?

1. Increasing residential mortgage rates

2. Rising family formation rates

3. Stable employment rates

4. Increasing unemployment rates

The correct answer is: Increasing unemployment rates

Increasing unemployment rates can dampen buyer demand in Anycity if market conditions change because high unemployment can lead to a decrease in consumer confidence and purchasing power. When individuals are uncertain about their job security or face actual job losses, they are less likely to make big financial commitments like buying a home. This can ultimately lead to a decrease in buyer demand in the real estate market. The other options do not relate directly to reducing buyer demand in the same way that increasing unemployment rates do. Rising family formation rates may actually increase buyer demand as more families look for homes. Stable employment rates and increasing residential mortgage rates may have some impact on buyer demand, but they are not as directly tied to dampening demand as increasing unemployment rates.