California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

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Rising mortgage interest rates will tend to

  1. Increase property values

  2. Lower property values

  3. Stabilize property values

  4. Have no effect on property values

The correct answer is: Lower property values

Rising mortgage interest rates will lead to higher overall borrowing costs for potential buyers, making it more difficult for them to afford homes and reducing demand. This decrease in demand can lead to a decrease in property values. Conversely, lower mortgage interest rates make purchasing a home more affordable and can lead to an increase in demand and property values. Therefore, the correct answer is B, as rising interest rates would have a negative impact on property values. A, C, and D are incorrect because they suggest that rising interest rates would have a positive, neutral, or no impact on property values, respectively, which is not the case.

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