A higher interest rate is only one of the factors, albeit an important one, that keeps the housing market from spiraling out of control, like it did earlier in the decade

the right answer choice is as folllows:
keep the housing market from spiraling out of control, as it did

However, the answer choice ignores that "of is just the middleman". The manhattan sc book explains that eliminate the "of" construction to see the true subject of the sentence. Using the same method, one establishes that "one" is the subject, which is an important one. But the answer choice calls it wrong and indicates that "factors" is the true subject and should be matched with the correct verb "keep".

Besides the above discrepancy, the rest of the sentence is singular as "the factors that keep housing market from spiralling out of control, as it did" if the subject was plural then the pronoun used should also have been plural, which is not the case.

Can the instructor throw more light on the above topic and explain rationale for the given answer choice.

Thanks

Best
Divya

"One" is one of those special indefinite pronouns for which you must examine the object of the the preposition (the "of construction") to determine the whether to use a singular or plural verb. Remember the acronym SANAM (some, any, none, all, most) mentioned in the Strategy Guide? Well the acronym should more appropriately be called SANAMO to include the indefinite pronoun, "one."

The key clue here is the "that" following factors. (You can ignore the phrase set off by commas "albeit an important one.") "That" indicates an essential noun modifier, which means the clause following it is modifying the noun immediately preceding it - factors (again, ignore that phrase set off by the commas). So, "factors keep" is the correct subject-verb match here.

I have an additonal question to the use of pronoun 'it' in this sentence.

I'm not a native english speaker so to me 'it' in the phrase 'like it did earlier in the decade' can logically refer to either the rate or the market. Is it unambigious to the author because as discussed above 'one of the factors' is plural.

And would the use of 'it' still remains clear for you if the sentence originaly was written this way:
A higher interest rate is an important factor, that keeps the housing market from spiraling out of control, like it did earlier in the decade.

Thanks in advance,
Vladimir

When you say "as it did" you are referring to some noun that did something. Earlier in the sentence, the "rate" didn't do anything - I can't say, "oh, earlier in the decade the rate did X." The "market" on the other hand was spiraling out of control earlier in the decade - I know what "it did."

Same would be true if you changed the sentence to "an important factor" instead of "only one of the factors" - that doesn't change the "it did" issue.