Humber/Ontario Real Estate Course 3 Exam Practice

To determine market conditions, which factor is least likely to indicate a seller’s market?

1. Rising unemployment rates in the city.

2. Rising housing prices due to market inflation.

3. Decreasing mortgage interest rates.

4. Increased family formation rates in the city.

5. Stable job growth and decreasing unemployment.

6. Decreasing housing inventory.

The correct answer is: Rising unemployment rates in the city.

Rising unemployment rates in the city is least likely to indicate a seller's market because a seller's market is characterized by strong demand for housing, often resulting in increased competition among buyers and rising prices. High unemployment rates typically lead to decreased consumer confidence and reduced purchasing power, which can lead to fewer people looking to buy homes. As a result, this would suggest weaker demand and a potential buyer's market instead. In contrast, factors such as rising housing prices due to market inflation, decreasing mortgage interest rates, increased family formation rates, stable job growth along with decreasing unemployment, and decreasing housing inventory all point towards conditions that favor sellers. These situations typically create enthusiasm for homebuying, pushing prices up and attracting more competitive bidding among buyers, which distinctly characterizes a seller's market.