Hi!

Scarcity of housing in a particular market ---> larger than normal increases in price
And then the author states example to support his point.

Which of the following is an assumption that supports the analyst's assertion?

A. In the housing market, there generally must be at least five buyers per seller in order to cause larger than normal increases in price.--> Out of scope

B. Increases in demand often reflect an influx of new buyers into the marketplace or an unusual increase in buying power on the part of the customer.-->Out of scope, nothing about new buyer is discussed

C. The U.S. housing market showed a larger than average increase in the 1990s across the country, not just in crowded urban areas.-->Irrelevant

D. Price increases do not cause people to withhold their houses from the market in the hopes that prices will increase even further in the future.--> This is the only supporting option because, if this is false, this would mean that it is not the high population but the people who are causing the scarcity.

E. A significant rise in housing prices in a specific area may cause some potential buyers to relocate to other, less pricey areas.-->Even if does, there are other buyers and the demand for the house might still rise- OUT

For assumption questions, the correct answer choice will fit one of the below:
*Eliminate an alternate cause for the stated effect
*Show that when the cause occurs, the effect occurs
*Shows that when the cause does not occur, the effect does not occur
*Eliminates the possibility that the stated relationship is reversed- Claimed effect is actually the cause of claimed cause
*Shows that the data used to make the causal statement are accurate or eliminates possible problems with the data

For this question we can use the first choice.

There might be other fit, but these are few of the important ones.

Hope this helps!