If interest rates remain at their current high levels, many people who currently rent their residences will hesitate to purchase homes. As the price of real estate continues to climb, the costs of a mortgage will be too burdensome. Sellers will be forced to lower their asking prices. So, high interest rates will eventually cause the real estate market to stabilize.

In the argument above, the portions in boldface play which of the following roles?

A. The first is the author's main point; the second is a prediction that follows from that point.

B. The first is a consideration that the author believes will result in a certain situation; the second is that situation.

C. The first is a consideration that weighs against the author's main point; the second is the author's main point.

D. The first is a prediction; the second is evidence in support of that prediction.

E. The first is the author's main point; the second is evidence used to argue against that point.

OA is B and I think it is wrong.

I don't get it.

If interests remain high, people won't buy homes.

As prices rise, sellers will be forced to lower prices. Cost of mortgages will be too burdensome.

Hence, high interest rates will cause the real estate market to stabilize.

I suppose "stabilize" means people will start buying homes again. How is bold statement 1 what will happen in the situation in statement 2? That implies: When high rates cause the real estate market to stabilize, people will hesitate to purchase homes (even though sellers will be forced to lower their asking prices considering the high mortgages rates). It doesn't make sense to me!

here's the problem:


that's not what "stabilize" means, in terms of markets. "stabilize" means that PRICES WILL REACH EQUILIBRIUM (i.e., they will reach a reasonable market price and will cease to rise/fall, at least temporarily).
in the context of this problem, "stabilize" means that the real estate prices will stop rising and will settle.

it is possible, though, that we are requiring too much of readers here. perhaps we should re-word the problem so that it says "real estate prices will stabilize".
i'll submit it for review.

I was also completely perplexed with this problem because in my mind stabilize would mean prices would drop. Bump for getting this question reviewed :)

Good points all, but notice that you could answer the question even given this ambiguity.

If you found the reasoning puzzling, but recognized the roles of the bold phrases, you'd still get this right. Suppose that you noticed the word "if" and "so," and so inferred that the first bold was some sort of premise and that the second bold was something like a conclusion, you'd be fine. Only B and D work for the first blank, and only B and C work for the second blank.

Of course, if you found the reasoning so puzzling that you couldn't recognize the first as evidence or the second as conclusion, then all bets are off.

Apologize to bump the old thread. I came across this problem while attempting CAT.
Moreover,I could narrow down to B and C.
Eventually, I selected C. :(

Could anybody shed some light on details of both the options?
Also, what is the reason that makes 'weighs against' totally wrong?

Thanks :)

If interest rates remain at their current high levels, many people who currently rent their residences will hesitate to purchase homes. As the price of real estate continues to climb, the costs of a mortgage will be too burdensome. Sellers will be forced to lower their asking prices. So, high interest rates will eventually cause the real estate market to stabilize.

B. The first is a consideration that the author believes will result in a certain situation; the second is that situation.

C. The first is a consideration that weighs against the author's main point; the second is the author's main point.

Let's see what's going on here:
1) Interest rates are high--people don't buy houses
AND Real estate prices climb--people can't afford mortgages
2) Because of these two factors, sellers can't sell their houses and have to lower prices
3) As a result, the real estate market stabilizes

If we consider C, the author's main point would be that high interest rates will stabilize the real estate market (nicely tipped off by the "so"). The first bold does not "weigh against" (or weaken) this main point; in fact, it is one of the conditions that helps lead to this main point. Check out how B reflects the roles of these statements in the argument much better.

I hope this helps!

_________________
Jamie Nelson
ManhattanGMAT Instructor