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Why do interest rates on home mortgages increase when demand for housing increases?

A.
Banks look for ways to decrease incentives to buyers as much as possible when demand is high.

B.
When the demand for mortgages increases, lenders can increase the cost of borrowing money.

C.
Interest rates on home mortgages do not move in response to consumers’ actions.

D.
When demand is high, interest rates decrease on most goods and services, including houses.

B. When the demand for mortgages increases, lenders can increase the cost of borrowing money. This is because the lenders can charge higher interest rates on mortgages when demand for housing is high. This helps them to control the flow of money and balance their lending activities. When demand is low, lenders will typically decrease interest rates to encourage borrowing and lending activities.