juan is always researching different investment options. a few weeks ago he noticed some nice homes for sale…

juan is always researching different investment options. a few weeks ago he noticed some nice homes for sale in his neighborhood. the listed prices were below market value. today on the news he heard that the federal reserve lowered interest rates for banks and that banks have lowered interest rates for home mortgages in turn. as a result, there has been a huge boom in the number of people purchasing homes. what is most likely to happen as a result of the change in interest rates? housing prices will go up and down due to changing fiscal policy. the market will experience more demand and the price of houses will go up. the price of houses will go down in response to the decreased demand. the prices for homes in that area will be stable due to the new monetary policy.

juan is always researching different investment options. a few weeks ago he noticed some nice homes for sale in his neighborhood. the listed prices were below market value. today on the news he heard that the federal reserve lowered interest rates for banks and that banks have lowered interest rates for home mortgages in turn. as a result, there has been a huge boom in the number of people purchasing homes. what is most likely to happen as a result of the change in interest rates? housing prices will go up and down due to changing fiscal policy. the market will experience more demand and the price of houses will go up. the price of houses will go down in response to the decreased demand. the prices for homes in that area will be stable due to the new monetary policy.

Answer

Brief Explanations:

When the Federal Reserve lowers interest - rates for banks and banks lower home mortgage interest rates, borrowing becomes cheaper. This leads to an increase in the number of people who can afford to buy homes, increasing demand. According to the law of supply and demand, when demand increases and supply remains the same (or changes less significantly), prices rise.

Answer:

The market will experience more demand and the price of houses will go up.