Unexpected Interview Question

#1

I was once asked in an interview; “Have you been looking at places to live around here yet?”. Looking back, I’m wondering what the best answer to this question would have been. I said I hadn’t started looking for places yet, but would this have come across as though I didn’t want the job enough? But if I had said yes, it could have come across as arrogant to assume I would get the job.

Just curious to get other people’s thoughts on this. Thanks!