CR - recent boom in new home construction

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SubratGmat2011: Junior | Next Rank: 30 Posts; Posts: 24; Joined: Mon Jul 05, 2010 11:35 pm; Thanked: 1 times

by SubratGmat2011 » Wed Sep 29, 2010 12:46 am

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

Source: Beat The GMAT — Critical Reasoning | Wed Sep 29, 2010 12:46 am

alivapriyada: Master | Next Rank: 500 Posts; Posts: 146; Joined: Fri Jun 25, 2010 3:42 amFollowed by: 1 member; Thanked: 3 times; GMAT Score:560

by alivapriyada » Wed Sep 29, 2010 1:09 am

IMO A

goyalsau: Legendary Member; Posts: 866; Joined: Mon Aug 02, 2010 6:46 pm; Location: Gwalior, India; Thanked: 31 times

by goyalsau » Wed Sep 29, 2010 1:17 am

I am right only at 5 times out of 10.
But this time i think i am right.
option A.

Saurabh Goyal
[email protected]
-------------------------

EveryBody Wants to Win But Nobody wants to prepare for Win.

gmatmachoman: Legendary Member; Posts: 2326; Joined: Mon Jul 28, 2008 3:54 amFollowed by: 2 members; Thanked: 173 times; GMAT Score:710

by gmatmachoman » Wed Sep 29, 2010 1:40 am

IMO C

C introduces a alternative reasoning for the decline in sales of new home construction

R&D on GMAT algorithm:

https://www.beatthegmat.com/r-d-on-gmat- ... tml#305739

saurabhmahajan: Master | Next Rank: 500 Posts; Posts: 250; Joined: Thu Jan 07, 2010 2:21 am; Thanked: 10 times

by saurabhmahajan » Wed Sep 29, 2010 1:48 am

IMO: C

because it counters the argument that sales have droped.Also i found option A as a reason for decline and not a flaw.

Thanks and regards,
Saurabh Mahajan

I can understand you not winning,but i will not forgive you for not trying.

psychomath: Senior | Next Rank: 100 Posts; Posts: 95; Joined: Wed Sep 15, 2010 10:16 pm

by psychomath » Wed Sep 29, 2010 7:02 am

I will go with A here

g000fy: MBA Student; Posts: 113; Joined: Sat Dec 05, 2009 10:05 pm; Location: West Lafayette; Thanked: 1 times; GMAT Score:700

by g000fy » Wed Sep 29, 2010 7:21 am

This is not a weaken question, so normal rules for weaken questions don't apply.

C tells you people are buying condos now but doesn't tell you why
A on the other hand offers an alternate reasoning that the cause is high mortgage interest rates. (Therefore, people not buying new homes but buying condos or not buying at all).

diebeatsthegmat: Legendary Member; Posts: 1119; Joined: Fri May 07, 2010 8:50 amFollowed by: 3 members; Thanked: 29 times

by diebeatsthegmat » Wed Sep 29, 2010 7:39 am

SubratGmat2011 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?
"¢ Interest rates for home mortgages have increased significantly over the past six months.
"¢ The average size of a new home has increased significantly over the past several years.
"¢ Sales of condominiums have increased over the past six months.
"¢ The cost of materials such as lumber and cement has decreased over the past year.
"¢ Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.

only C makes sense for the question

the sale of new home construction decreased because developer are not buying land, no works for contractor and mortgages decreased
conlusion: people are not interested in buying new home.

we have to weaken the conclusion
A. there is no where in the CR mention interest rates for home mortgage. Eliminate it
B. who cares of the size of new home? if the buyers are interested of the house, they still buy no matter what its large or small... purchasing house depends on so many other things such as enviroment, safy, developing situation in the town blah blah
C. this makes sense... it means that people are still interested at buying home, or condominiums i think the word " home" are with large meanings. it includes house, apartment, condominium...
D..no cost is mentioned in the text
E out of scope

diebeatsthegmat: Legendary Member; Posts: 1119; Joined: Fri May 07, 2010 8:50 amFollowed by: 3 members; Thanked: 29 times

by diebeatsthegmat » Wed Sep 29, 2010 7:46 am

diebeatsthegmat wrote:
SubratGmat2011 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?
"¢ Interest rates for home mortgages have increased significantly over the past six months.
"¢ The average size of a new home has increased significantly over the past several years.
"¢ Sales of condominiums have increased over the past six months.
"¢ The cost of materials such as lumber and cement has decreased over the past year.
"¢ Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.
only C makes sense for the question

the sale of new home construction decreased because developer are not buying land, no works for contractor and mortgages decreased
conlusion: people are not interested in buying new home.

we have to weaken the conclusion
A. there is no where in the CR mention interest rates for home mortgage. Eliminate it
B. who cares of the size of new home? if the buyers are interested of the house, they still buy no matter what its large or small... purchasing house depends on so many other things such as enviroment, safy, developing situation in the town blah blah more over it also explain for the first sentence stated in the CR that the purchasing home decreased
C. this makes sense... it means that people are still interested at buying home, or condominiums i think the word " home" are with large meanings. it includes house, apartment, condominium...
D..no cost is mentioned in the text
E out of scope

goyalsau: Legendary Member; Posts: 866; Joined: Mon Aug 02, 2010 6:46 pm; Location: Gwalior, India; Thanked: 31 times

by goyalsau » Wed Sep 29, 2010 7:51 am

So guys which option is correct over here?
A or C

Saurabh Goyal
[email protected]
-------------------------

EveryBody Wants to Win But Nobody wants to prepare for Win.

g000fy: MBA Student; Posts: 113; Joined: Sat Dec 05, 2009 10:05 pm; Location: West Lafayette; Thanked: 1 times; GMAT Score:700

by g000fy » Wed Sep 29, 2010 8:23 am

goyalsau wrote:So guys which option is correct over here?
A or C

hitmis: Master | Next Rank: 500 Posts; Posts: 104; Joined: Thu Mar 25, 2010 3:32 amFollowed by: 1 member; Location: Mumbai; Thanked: 7 times; GMAT Score:680

by hitmis » Wed Sep 29, 2010 7:34 pm

imo C.

Author considers that there is a flaw in the reasoning that People must not be as interested in buying new homes as they were even six months ago

Increased interest rates would be an added explanation to the reasoning that people are not interested, not a flaw.
This is a tricky one... I'm not entirely convinced with C being a flaw, but its the best answer given the choices I think.

SubratGmat2011 can you post the OA please.

regards

https://footprintsilived.blocked/

goyalsau: Legendary Member; Posts: 866; Joined: Mon Aug 02, 2010 6:46 pm; Location: Gwalior, India; Thanked: 31 times

by goyalsau » Thu Sep 30, 2010 4:25 am

hitmis wrote:imo C.

Author considers that there is a flaw in the reasoning that People must not be as interested in buying new homes as they were even six months ago

Increased interest rates would be an added explanation to the reasoning that people are not interested, not a flaw.
This is a tricky one... I'm not entirely convinced with C being a flaw, but its the best answer given the choices I think.

SubratGmat2011 can you post the OA please.

You are absolutely right. Its very important to consider the quality of question as well.
Because as i see that i am so good in CR and if do those questions which can not be called proper questions of Gmat
Than that can harm my reasoning to a great extent.

Saurabh Goyal
[email protected]
-------------------------

EveryBody Wants to Win But Nobody wants to prepare for Win.

Yanat: Senior | Next Rank: 100 Posts; Posts: 77; Joined: Sat Sep 25, 2010 9:45 pm

by Yanat » Tue Oct 05, 2010 8:10 am

IMO, it is A i.e. Interest rates for home mortgages have increased significantly over the past six months.

Here the question is finding the flaw.

Main point is house construction is tapering

Reasons: developers not buying land, contractors out of work for long, banks not offering mortgages and people are not interested as such.

If the banks are offering lesser mortgages because the people are not interested for a simple fact, high interest rates for home mortgages. So this is a flaw in the reasoning

bubbliiiiiiii: Legendary Member; Posts: 979; Joined: Tue Apr 14, 2009 1:38 amFollowed by: 12 members; Location: Hyderabad, India; Thanked: 49 times; GMAT Score:700

by bubbliiiiiiii » Tue Oct 05, 2010 9:23 pm

Guys, I have an opinion that is different from all others !! So wanted to start with how I actually understood the stimulus.

recent boom in new home construction has finally begun to taper off

Effects of the recent boom going dowm are,

Developers are not buying land
Contractors are finding themselves going without work for longer periods
Banks are issuing fewer mortgages.

Thus, people are not interested in buying homes as they were 6 months ago!

Question:
Which of the following indicates a flaw in the reasoning above?

"¢ Interest rates for home mortgages have increased significantly over the past six months.
Reasonably reasoned, as the banks could restrict the issual the of loans by increasing interest rates which inadverently keeps the loan takers at bay.
"¢ The average size of a new home has increased significantly over the past several years.
I perceive that since there is a downturn, land gets cheaper and home size should not matter! Thus, a contender.
"¢ Sales of condominiums have increased over the past six months.
The author in general says .. home but doesnot comment on type of home. Thus, a contender.
"¢ The cost of materials such as lumber and cement has decreased over the past year.
Out of context!
"¢ Sales of other big-ticket items, such as automobiles and boats, has remained steady over the past year.
Out of Context!

Between B and C, if the average home size goes up, the cost of home goes up. Since banks have limited mortgages, this could stop aspirants from purchasing home.

Thus C.

OA Please!!!!!

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