Choose the correct option: The last time we______ dinner with them, they________for the new house.

Choose the correct option: The last time we dinner with them, they__for the new house.

Have had/looked

Were having/have been looking

Have been having/look

Had/were looking

The correct sentence would be: "The last time we had dinner with them, they were looking for a new house."
This sentence uses the past perfect tense (had) to describe an action that occurred before another action in the past (were looking).
The past perfect tense is used to show that one event happened before another in the past.