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# The recent boom in new home construction has finally begun

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The recent boom in new home construction has finally begun  [#permalink]

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28 Apr 2012, 21:22
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Difficulty:

75% (hard)

Question Stats:

42% (01:30) correct 58% (01:41) wrong based on 836 sessions

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The recent boom in new home construction has finally begun to taper off. Developers are not buying land, contractors are finding themselves going without work for longer periods, and banks are issuing fewer mortgages. People must not be as interested in buying new homes as they were even six months ago. Which of the following indicates a flaw in the reasoning above?

(A) Interest rates for home mortgages have increased significantly over the past six months.
(B) The average size of a new home has increased significantly over the past several years.
(C) Sales of condominiums have increased over the past six months.
(D) The cost of materials such as lumber and cement has decreased over the past year.
(E) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.

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Re: The recent boom in new home construction has finally begun  [#permalink]

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07 May 2012, 10:29
1
A) Interest rates for home mortgages have increased significantly over the past six months.--- Strengthen the argument
b) The average size of a new home has increased significantly over the past several years.-Not relevant
c) Sales of condominiums have increased over the past six months.-Hold, this proves that people still want to buy condos
d) The cost of materials such as lumber and cement has decreased over the past year.-Very tempting but it does not have a strong connection with the premises as in choice c
e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the
past year.-Not relevant

Thus choice c is an answer.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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Updated on: 03 Mar 2014, 13:24
1
GetThisDone wrote:
The recent boom in new home construction has finally begun to taper off. Developers are not
buying land, contractors are finding themselves going without work for longer periods, and
banks are issuing fewer mortgages. People must not be as interested in buying new homes as
they were even six months ago. Which of the following indicates a flaw in the reasoning
above?
A) Interest rates for home mortgages have increased significantly over the past six months.
b) The average size of a new home has increased significantly over the past several years.
c) Sales of condominiums have increased over the past six months.
d) The cost of materials such as lumber and cement has decreased over the past year.
e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the
past year.

Main CR Qs link - Main link - cr-qs-600-700-level-131508.html

Wow, can't believe I got this one wrong. But well, let's see. My reasoning was..
First, the conclusion: "People must not be as interested in buying new homes as they were even six months ago" because of X,Y,Z in the stimulus.
Now what I thought inmediately after seeing (A) was it is not that people are not as interested in buying new houses, maybe they are but it is more expensive now, so they can't afford it. So (A) indicates a flaw in the argument.

Now answer (C) seems like a nice choice, but still the problem is that we can't actually assume that these condos are new homes, if they are existing ones then it does not weaken the conclusion at all

I wonder what is wrong in my reasoning...
Experts please advice
Thanks

Originally posted by jlgdr on 11 Oct 2013, 12:45.
Last edited by jlgdr on 03 Mar 2014, 13:24, edited 1 time in total.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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15 Oct 2013, 01:05
It looks like weakening question, why is it placed as "flaw". It must be trick of developer. I also chose A
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Re: The recent boom in new home construction has finally begun  [#permalink]

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15 Oct 2013, 02:28
4
jlgdr wrote:
GetThisDone wrote:
The recent boom in new home construction has finally begun to taper off. Developers are not
buying land, contractors are finding themselves going without work for longer periods, and
banks are issuing fewer mortgages. People must not be as interested in buying new homes as
they were even six months ago. Which of the following indicates a flaw in the reasoning
above?
A) Interest rates for home mortgages have increased significantly over the past six months.
b) The average size of a new home has increased significantly over the past several years.
c) Sales of condominiums have increased over the past six months.
d) The cost of materials such as lumber and cement has decreased over the past year.
e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the
past year.

Main CR Qs link - Main link - cr-qs-600-700-level-131508.html

Wow, can't believe I got this one wrong. But well, let's see. My reasoning was..

First, the conclusion: "People must not be as interested in buying new homes as they were even six months ago" because of X,Y,Z in the stimulus.
Now what I thought inmediately after seeing (A) was it is not that people are not as interested in buying new houses, maybe they are but it is more expensive now, so they can't afford it. So (A) indicates a flaw in the argument.

Now answer (C) seems like a nice choice, but still, I wonder what is wrong in my reasoning...
Experts please advice
Thanks

I am no expert but I an try and differentiate why C is a better choice than A.

A) Interest rates for home mortgages have increased significantly over the past six months. ---- Interest rates for home mortgages have increased does indicate a flaw but not as explicitly as option C. But you have to assume that the people interest depends on the interest rates. I think this is not stated anywhere in the argument and hence a bit too much to assume. It is not necessary that people buy homes with the help of a home mortgage.

C) Sales of condominiums have increased over the past six months.---- This directly indicates the flaw because if the sales of condos have increased more people are still interested in buying new homes. Perhaps there is are a lot of available apartments in the market right now so people are still interested in buying houses. An excess supply could also be a reason why developers are not buying land and contractors are out of work. And perhaps people do not need banks to buy condos.
These were all just hypothetical situations but it shows that if people are buying condominiums, they are still interested in buying new homes.

And of course B, D, E are out of scope.

Hope this helps.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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07 Feb 2014, 01:25
Interesting. I also selected A over C because C does not contradict the underlying assumption, it contradicts the conclusion itself. Which is little bit weird for a CR flaw question.

Experts please comment?
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Re: The recent boom in new home construction has finally begun  [#permalink]

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14 May 2015, 11:01
What is the conclusion in the argument?
As per me it should be The recent boom in new home construction has finally begun to tapper off and assumption is people must have become less interested in buying homes.
Please correct my logic
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Re: The recent boom in new home construction has finally begun  [#permalink]

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01 Mar 2017, 03:41
The kind of options given to us suggest that the question stem is incorrectly worded. It should have been which of the following, if true, will weaken the argument.

A) Interest rates for home mortgages have increased significantly over the past six months.( Wrong Answer : This option is only obliquely connected to the argument. This option suggests that those buyers who would wish to mortgage one of their houses to buy another house would be discouraged from doing so. But this option doesn’t say anything about the other types of buyers.)
b) The average size of a new home has increased significantly over the past several years.( Wrong Answer : This option only talks about those buyers who are planning to buy a new house because their existing house is not big enough to accomodate all the family members. But this option doesn’t suggest anything about those buyers who buy houses for reasons other than the one suggested above.)
c) Sales of condominiums have increased over the past six months.( Right Answer : This option weakens the argument by providing an alternate cause for the effect to take place.)
d) The cost of materials such as lumber and cement has decreased over the past year.( Wrong Answer : This option doesn’t affect the argument.)
e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the
past year.( Wrong Answer : This option is irrelevant to the argument at hand.)
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Re: The recent boom in new home construction has finally begun  [#permalink]

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02 Mar 2017, 11:54
The recent boom in new home construction has finally begun to taper off. Developers are not
buying land, contractors are finding themselves going without work for longer periods, and
banks are issuing fewer mortgages. People must not be as interested in buying new homes as
they were even six months ago. Which of the following indicates a flaw in the reasoning
above?
A) Interest rates for home mortgages have increased significantly over the past six months.
b) The average size of a new home has increased significantly over the past several years.
c) Sales of condominiums have increased over the past six months.
d) The cost of materials such as lumber and cement has decreased over the past year.
e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the
past year.

Option C is correct since the option C says sales of condominiums have increased. so its not the case that the industry is going down but people are prefering condominiums over other housing structures.
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10 May 2017, 12:10
Option (A) is a weaken-er. Answer choices for finding flaw do not introduce new information.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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11 May 2017, 02:34
3
If sales of condominiums have increased over the past six months, the following would not be true.

"Developers are not buying land, contractors are finding themselves going without work for longer periods, and banks are issuing fewer mortgages.".

So, option A is correct.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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03 Jul 2017, 09:09
C is wrong because the conclusion states "interested in buying NEW homes"; in C, the old houses can be made for resale
A is correct because A indicates another cause for decline in purchase of NEW homes.
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06 Jul 2017, 00:52
Right Answer is option C. This option weakens the argument by providing an alternate cause for the effect to take place.
It obviously is anti to the fact that people are still interested in buying homes new/old whatever.

For option A people might or might not be dependent on mortgages to purchase homes.
Both A and C are close options but C seems stronger in opposing the fact.
Please advise.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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07 Jul 2017, 09:02
FB2017 wrote:
Right Answer is option C. This option weakens the argument by providing an alternate cause for the effect to take place.
It obviously is anti to the fact that people are still interested in buying homes new/old whatever.

For option A people might or might not be dependent on mortgages to purchase homes.
Both A and C are close options but C seems stronger in opposing the fact.
Please advise.

sorry my friend, you are wrong.
Sales can include resale, and morgage interests is another cause that deter people from buying house => C is quite contradict with what is stated in the argument. In other words, the arguments implies that the sales is going down, and the argument holds lack of interests in buying new houses accountable for the decline in sales.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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20 Jul 2017, 12:25
My reasoning:

The recent boom in new home construction has finally begun to taper off. Developers are not buying land, contractors are finding themselves going without work for longer periods, and banks are issuing fewer mortgages. People must not be as interested in buying new homes as they were even six months ago. Which of the following indicates a flaw in the reasoning above?

I felt that the stem is asking us about the FLAW in the arrival of the conclusion - so we need to pick the gap in the argument than only weaken or break it.

(A) Interest rates for home mortgages have increased significantly over the past six months - Coincides with the tapering of the boom. It clearly says: developers buy less, contractors are without work and banks give fewer mortgages. If we reverse the sequence we will know the clear reason - mortgages. People aren't choosing to buy less, they CAN'T as there has been an increase in interest rates. It would also explain that in case rates of interest DIDN'T increase, but fewer mortgages were given, development would still occur and boom may still be there.
(B) The average size of a new home has increased significantly over the past several years.
(C) Sales of condominiums have increased over the past six months. Condos still need to be built - if developers have overall slowed down, it doesn't give us any light as to why the conclusion is still 'the boom has slowed down'. That is, Condos would still contribute to overall revenue if it did increase.
(D) The cost of materials such as lumber and cement has decreased over the past year.
(E) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.

Hope this was helpful!
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28 Jul 2017, 10:32
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Answer according to me should be A and not C. Here's my explanation.

Option C if anything,weakens the conclusion. The sale of condominiums has increased and therefore it clearly tells that people are still interested. Moreover option C sounds very specific by mentioning condominium, while the argument only states homes. They could be individual houses as well.

(A) Interest rates for home mortgages have increased significantly over the past six months.

A flaw however, should not support the conclusion(weakening and not supporting are different). Due to the increased mortgage rates people are not willing to shell out so much extra money, while they might still be interested in buying homes. Points out to the flaw that increased mortgage rates are putting people off from buying new homes and not their lack of interest.

I hope my reasoning was satisfying.
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Re: The recent boom in new home construction has finally begun  [#permalink]

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11 Jul 2018, 18:34
Experts plz comment on this topic
why C is wrong?

Posted from my mobile device
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The recent boom in new home construction has finally begun  [#permalink]

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14 Jul 2018, 19:11
GetThisDone wrote:
The recent boom in new home construction has finally begun to taper off. Developers are not buying land, contractors are finding themselves going without work for longer periods, and banks are issuing fewer mortgages. People must not be as interested in buying new homes as they were even six months ago. Which of the following indicates a flaw in the reasoning above?

(A) Interest rates for home mortgages have increased significantly over the past six months.
(B) The average size of a new home has increased significantly over the past several years.
(C) Sales of condominiums have increased over the past six months.
(D) The cost of materials such as lumber and cement has decreased over the past year.
(E) Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.

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egmat , GMATNinja

Conclusion: People must not be as interested in buying new homes as they were even six months ago.

Premise: Developers are not buying land, contractors are finding themselves going without work for longer periods, and banks are issuing fewer mortgages.

I am confused between A and C though I chose C on the following grounds:

A - Though this option gives a second possible reason to explain why the demand has gone down, it can still be linked to the interest of the people. If interest rates have gone up significantly, this will definitely have an impact on the interest of the people to not buy new homes. This according to me is a strengthener.

C - If sale of condominiums have gone up, this means people are still buying new homes. As per definition, a condominium is "a building or complex of buildings containing a number of individually owned apartments or houses." This means that the developers would need land to to develop the condominiums and contractors would build them. Now that they are ready, it could be possible that the demand is not as high as it was 6 months ago because a number of new houses or apartments are now available in the market and is sufficient meeting the demand. Hence, this is the flaw.

Now the only gap that i see in C is that it talks about the sale of condominiums as a whole and not the individual apartments in it. In such a case, option C would be out of scope and A would be a better choice.

Experts please let me know if my reasoning is correct.
The recent boom in new home construction has finally begun   [#permalink] 14 Jul 2018, 19:11
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