One economic factor that can restrain the maximum rate of home price appreciation is

Question

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The relatively elastic supply of land available for residential development can restrain the maximum rate of home price appreciation by increasing the supply of housing, which can help to offset any increase in demand and prevent an excessive increase in home prices. This is because when there is a greater supply of housing available, home buyers have more options to choose from and are not forced to compete as fiercely for a limited number of properties. As a result, sellers may have to adjust their prices downward to attract buyers, which can help to moderate home price appreciation. Factors such as the availability of negative amortization and pay option ARMs may increase demand for housing and contribute to home price appreciation, but they do not necessarily constrain it. Similarly, geographic barriers to residential development may limit the availability of land for development, but may not necessarily constrain home price appreciation if demand for housing in the area is high enough.

One Economic Factor That Can Restrain the Maximum Rate of Home