Finance
When interest rates rise, demand for real estate typically:
AIncreases because money becomes more valuable
BDecreases because higher rates reduce affordability and purchasing power✓ Correct
CStays the same because real estate demand is inelastic
DIncreases because investors seek real estate as an inflation hedge
Explanation
Higher interest rates increase the cost of mortgage financing, reducing buyer affordability and purchasing power. This typically leads to reduced demand and downward pressure on prices.
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