'Filtering' describes the process by which:

Correct Answer

A) Housing passes down the income ladder as it ages and new stock is built

Why this is correct: Filtering is a real estate economics concept where housing stock becomes more affordable over time. As new homes are built for higher-income buyers, their previous homes become available to middle-income buyers, and so on down the income ladder. Why the other choices are wrong: "Lenders screen borrowers by credit score" describes underwriting, not filtering. "Cities remove condemned structures" describes demolition or abatement. "The process appraisers use to select comparables from the MLS data" is part of the sales comparison approach. Exam tip: Filtering explains how new construction indirectly affects affordability for lower-income households.