raiprem123
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ANALYZE THE STIMULUS:
Fact: Such uncertainties as fast changing market, single, and changing jobs discourage these young professionals from buying a home.
Fact: When settled with a spouse and a stable job, these young professionals generally choose to buy real estate.
Fact: Surprisingly, in cities where the industry and market are quite stable, young working professionals are still not buying, even though they are not changing jobs and may already be settled down in a spousal relationship.
Which of the following, if true, most helps to explain the surprising finding?
ANALYZE EACH ANSWER:
(A) Stable markets do not themselves entice working professionals to buy real estate rather than to rent it.
Wrong. Sounds tempting but incorrect. “Do not entice to buy more than to rent” means customers actually BUY real estates, but the number of homes sold do not overcome that of home rent. Thus, A does not help to explain why customers do NOT buy real estates.
(B) Brokers readily connect for-sale-homes with working professionals who have stable jobs and are in spousal relationships.
Wrong. Do not explain why customers do NOT buy real estates.
(C) The stability of industries varies widely from city to city.
Wrong. We do not talk about the range of variability. “Stable market” means “stable market”. That’s it. We do not care which city has industry more stable.
(D) A very expensive home can significantly decrease the ability of a working professional to fulfill his mortgage payments.
Wrong. We talk about real estate in general. “very expensive home” is just a sub-set of real estates. Thus, D does not help.
(E) Due to lending constraints, banks have increased the down payments required for consumers to obtain mortgages for new homes.
Correct. E shows the reason why consumers who have certain conditions cannot buy homes.
Hope it helps.
No where in the paragraph the real estate prices and young professionals income has been compared. So how can this be inferred that increasing down payments will cause the young professionals to not to buy new homes.
I eliminated options C, D and E after reading then and decided the best between A and B.
You have to evaluate each choice and see the question "Which of the following, if true, most helps to explain the surprising finding" Now, if you carefully analyze the answer choices, you may easily delete choice B, C, D.
Since choice B does not help to understand the surprise finding, infact it is working opposite that Brokers readily connect sale homes, so this choice cannot be the answer. I hope you are clear wih choice C and D.
Now to choose from Choice A and E :- first of all choice A only talks about stable market, it does not talk about stable job, which also a criteria for investment in real estate as per the argument. The choice A is not a better choice if you carefully read choice E.
Once again read the question. The question ask to find if any of the conditions are true, that satisfies why young working and married professional is not investing in real estate while they have both stable job. The choice informs a different condition, which informs if the down payment is increased, it would certainly be difficult for young working and married professional to defer their decision to invest in real estate.
You may put yourself in the example and think for solution, you may find choice E suits the best,