We should expect to see home construction activity decrease when interest rates increase.

Question

Quizplus · Accepted Answer

When interest rates increase, it becomes more expensive for individuals to borrow money for a mortgage to buy a home. This in turn reduces the demand for homes, which can lead to a decrease in home construction activity. Lowering interest rates may encourage more people to take out mortgages and consequently lead to an increase in home construction activity.

We Should Expect to See Home Construction Activity Decrease When