Free Practice Quiz Question List

2 Housing Markets and Affordability Online Quiz Questions

Use this free practice quiz with 20 questions to review 2 Housing Markets and Affordability, test your knowledge, and prepare for your next test or exam.

20 questions

True or false

1 point

True or false: Because homes differ by location, size, condition, and access to services, housing is best understood as many related local markets rather than one uniform market.

A
True
B
False

True or false

1 point

True or false: When housing demand increases, the number of available homes can usually expand immediately because construction takes little time.

A
True
B
False

Fill in the blank

1 point

HUD classifies a household as severely cost-burdened when it spends more than of its income on housing.

Choose one

1 point

A buyer qualifies for a mortgage, but the offered interest rate is higher than expected. What is a likely effect on the buyer's purchasing power?

A
It lowers the monthly payment, so the buyer can afford a more expensive home.
B
It raises the monthly payment, so the buyer may be able to afford a lower-priced home.
C
It affects only the buyer's credit history, not the cost of borrowing.
D
It guarantees that the buyer will qualify for a mortgage.

Written response

1 point

What term describes the number and kinds of homes people are willing and able to rent or buy at different prices?

True or false

1 point

True or false: Allowing more homes through zoning changes by itself guarantees that households with low incomes will be able to afford housing.

A
True
B
False

Written response

1 point

A household earns $\$5{,}000$ per month and spends $\$1{,}750$ per month on housing. What percentage of its monthly income goes to housing?

Choose one

1 point

A household spends 32% of its income on housing, so it is classified as cost-burdened by the 30% measure. What is an important limitation of drawing conclusions from this measure alone?

A
They show exactly how much income remains for necessities in every household.
B
They account fully for differences in household size and local costs.
C
They are useful screening measures but cannot capture every household's needs.
D
They prove whether a household has access to financing.

Choose all

1 point

Which factors may a mortgage lender consider when deciding whether to lend and what interest rate to offer? Select all that apply.

A
Credit history
B
A guarantee that the borrower will never have an unexpected expense
C
Existing debt
D
Savings and income

Fill in the blank

1 point

Besides rent and utilities, one upfront expense that can affect a renter's budget is .

Choose all

1 point

Which factors can change housing demand? Select all that apply.

A
Population changes
B
Household formation
C
The cost of building materials
D
Employment and income

Open ended

1 point

Explain how limited or expensive housing in well-resourced neighborhoods can contribute to segregation. Include at least two factors, besides household preferences, that can shape who is able to live in those neighborhoods.

Choose one

1 point

A high-demand area has zoning that prohibits apartments and requires large lots. How could these rules affect its housing supply?

A
Zoning can affect only the appearance of buildings, not the kinds of homes built.
B
Zoning can limit height or density, require large lots or parking, or prohibit apartments.
C
Zoning determines which households qualify for mortgage credit.
D
Zoning changes always produce homes affordable to low-income households.

Choose one

1 point

A household urgently needs a home but lacks the income or credit to qualify for available rentals. Which statement best describes the difference between its housing need and its market demand?

A
Their need for housing automatically counts as market demand, even if they cannot afford any available home.
B
Their need may be high, but their ability to compete in the private market may be limited.
C
Their situation shows that housing supply must be increasing.
D
Their situation means local housing prices will necessarily fall.

Choose one

1 point

A local area experiences a sudden increase in housing demand, but new construction takes time. What is the most likely short-run effect?

A
Available homes immediately increase to match demand, so rents and prices tend to stay unchanged.
B
Demand has no effect on rents or prices until every planned home is built.
C
Available homes cannot increase quickly, so rents and prices tend to rise when demand outpaces supply.
D
The number of homes immediately falls, so rents and prices tend to decrease.

Choose one

1 point

Two buyers seek the same loan amount, but one is offered a higher interest rate. How is the higher rate most likely to affect that buyer’s affordability?

A
A higher rate lowers the monthly payment, so the buyer can afford a more expensive home.
B
A higher rate raises the monthly payment, so the buyer may be able to afford a lower-priced home.
C
A higher rate affects only the home’s resale value, not the buyer’s monthly payment.
D
A higher rate removes the need for the lender to consider the buyer’s income and debt.

Choose one

1 point

A buyer is comparing a lender’s mortgage approval amount with the household’s monthly budget. Which approach gives a more complete picture of the cost of owning a home?

A
Include likely property taxes, insurance, utilities, maintenance, and repair costs.
B
Use the mortgage payment alone because other ownership costs do not affect affordability.
C
Use only the lender’s approval amount because it is the same as a household budget.
D
Ignore repair costs unless the home needs a repair on the day it is purchased.

Choose one

1 point

A city changes zoning to allow more homes in a high-demand area. Which conclusion is best supported?

A
Allowing more homes guarantees that all new homes will be affordable to households with low incomes.
B
Zoning affects only where people can rent, not the number or variety of homes that can be built.
C
Allowing more homes can support added supply, but additional measures may be needed to ensure affordability for low-income households.
D
Zoning changes cannot affect the number or variety of homes in a neighborhood.

Written response

1 point

What cost-burden classification does HUD commonly use for a household that spends more than 50% of its income on housing?

Written response

1 point

A vacant office building is adapted into apartments. What housing-supply process adds these homes to the housing stock?

2 Housing Markets and Affordability Online Quiz Questions

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