Which of these events would most likely lead to a rise in interest rates for home mortgages?

The prices of homes for sale in a certain city rise by a great deal.
Many new lenders begin offering home mortgages.
Home sales increase greatly for several months in a row.
The average time needed to sell a house doubles
c

I agree.

To determine which event would most likely lead to a rise in interest rates for home mortgages, we need to understand the factors that influence mortgage interest rates.

One of the key factors is the supply and demand dynamics in the housing market. When there is high demand for homes and limited supply, prices tend to rise, which can have an impact on mortgage interest rates.

Let's evaluate each event in order to identify which one is most likely to lead to a rise in interest rates:

1. The prices of homes for sale in a certain city rise by a great deal: This event indicates a surge in demand for homes, which could lead to a rise in interest rates as lenders may want to capitalize on the increased demand and potentially higher profitability. Therefore, this event has the potential to push interest rates higher.

2. Many new lenders begin offering home mortgages: The entry of new lenders into the market can increase competition, leading to more attractive terms and lower interest rates for borrowers rather than a rise in rates. Therefore, this event is less likely to result in increased interest rates.

3. Home sales increase greatly for several months in a row: This event demonstrates a sustained increase in housing demand, which could potentially lead to a rise in interest rates. As the demand for mortgages grows, lenders may increase rates to balance the increasing demand and manage their risk.

4. The average time needed to sell a house doubles: This event does not directly impact mortgage interest rates. While it may indicate a slowdown in the housing market, it does not directly affect the supply and demand relationship, which is a primary driver of interest rate changes.

Based on the analysis, the event that would most likely lead to a rise in interest rates for home mortgages is when the prices of homes for sale in a certain city rise by a great deal. Keep in mind that interest rates are influenced by multiple factors, and the actual outcome may depend on various economic conditions and policies in place.