Critical Reasoning

In January there was a large drop in the number of new houses sold, because interest rates for mortgages were falling and many consumers were waiting to see how low the rates would go. This large sales drop was accompanied by a sharp rise in the average price of new houses sold.

Which of the following, if true, best explains the sharp rise in the average price of new houses?

(A) Sales of higher-priced houses were unaffected by the sales drop because their purchasers have fewer constraints limiting the total amount they pay.
(B) Labor agreements of builders with construction unions are not due to expire until the next January.
(C) The prices of new houses have been rising slowly over the past three years because there is an increasing shortage of housing.
(D) There was a greater amount of moderate-priced housing available for resale by owners during January than in the preceding three months.
(E) Interest rates for home mortgages are expected to rise sharply later in the year if predictions of increased business activity in general prove to be accurate.

OA:A
to me C looks more logical!!

Answer is indeed A

Question Type : Resolve the paradox.

After reading the question, I knew that the question will give two statement which will appear opposite to each other.

F1: Sales of NEW houses was drooped because of X and Y.
F2: AVERAGE price of new houses was increased.

at outer layer, they seems conflicting to each other, but going one step deeper -
F1 talks about absolute numbers. ( For example - Sales number dropped from 10,000 to 500 ).
F2 talks about average price ( For example - Sum of prices of 500 houses/500 ).

Overall, it has been said that new average is higher than old average. How this can possible -
It is only possible if in 500 houses proportion of expensive houses was more compare to last time proportion. For example - May be last time out of all houses sold 30% were expensive, this time 40% of all house solve were expensive.

So before reading the answer choice I was looking for something that will give me either of below given 2 choices:
> Somehow demand of expensive houses were constant and demand of average/cheap houses was declined.
> Demand of expensive house was increased and demand of average/cheap houses was declined/Constant.

A) Here I got it What I was looking for.
B) Labor agreement ?? ( IRRELEVANT)
C) Its contradicting the fact given in stimulus. ( There are abundance of new houses available, beside how the prices has been fluctuating in last 3 years has not thing to do with average price in January compare with dropped demand for new house).
D) Again talking for how many number of houses were available.
E) Talking about Interest rates, doesn't explain the increased in average price.

Thanks,

Great explanation!

At very first glance I overlooker AVERAGE, and that was the blunder!!

Anyhow thanks!