Which measure most directly signals demand strength in a housing market?
Correct Answer
D) The pace of sales against current listings
Why this is correct: Demand strength is measured by absorption—the pace of sales relative to current listings (e.g., months of supply). A fast sales pace indicates strong demand. Why the other choices are wrong: Building permits measure future supply, not current demand. Average housing age describes stock, not demand. Number of agents is a market participant count, not a demand metric. Exam tip: Demand = absorption rate (sales/listings).
Why This Is the Correct Answer
Why this is correct: Demand strength is measured by absorption—the pace of sales relative to current listings (e.g., months of supply). A fast sales pace indicates strong demand. Why the other choices are wrong: Building permits measure future supply, not current demand. Average housing age describes stock, not demand. Number of agents is a market participant count, not a demand metric. Exam tip: Demand = absorption rate (sales/listings).
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