rates, there is evidence that we could be getting towards the bottom of the cre situation here in the u.s. >> okay. reits for shannon. jim, take us home. >> walt disney company. no time to go through the fundamentals. just look at the chart. this is just dieing to break out to a new 52-week high. >> as george lucas comes out with support of bob iger. that does it for "the halftime report." "the exchange" starts right now. ♪ ♪ >> thanks, courtney. welcome to "the exchange." i'm john fortman. with green on the green, abandon tech at your own peril says our own market guest. he joins with two tickers to consider from here. and speaking of tech, nvidia announcing extended partnership with data breaks. the ceo will join us for an interview ahead. we'll ask him about that and a possible ipo in the works. and more clues on housing. the latest data and talk to someone who has a front row seat

to buying and selling friends across the country. we begin with dom chu with the latest numbers. >> it's green across the screen, but the tech trade, which has been the leader for the last several days, and even months and quarters and years at this point, is the underperformer in todd's trade. we'll go through that in a moment. it's the dow up nearly 300 points, three quarters of a 1% gain there. so a laggard is the leader in today's trade. the s&p 500, the broader measure, 5170 the last trade there, up about 20 points. at the highs, we were up 23. so near session highs. we were down 18 points at the lows of the session. up one half of 1% there. and the nasdaq composite up 16,151, up 48 points, roughly 1/3 of 1%. so it's the laggard in today's trade. i mentioned the technology trade. crypto is part of that narrative right now. bitcoin prices, currently down about 3.5%, $64,800 and change.

remember, just in the last several days, bitcoin prices were above $73,000. eit ether prices were above $4,000. marathon digital, microstrategy, many stocks in that crypto ecosystem are down notably with today's trading. and specifically on technology, check out nvidia. the third biggest stock this the s&p 500. massive weighting over there. nvidia shares now swinging to the upside. they were down solidly earlier today on the heels of blackwell, their new ai chip. advanced microis down 4.5%. but super micro down 9%. they'll issue more shares. c3 ai, a couple of other ai names. watch that technology trade. an interesting reversal for nvidia right now. we'll see if it sticks.

>> dom, we can't help but watch nvidia. for a moment, we'll talk about the fed's decision on interest rates in just about 24 hours away. we start with steve liesman and the latest results from the cnbc fed survey. steve? >> respondents to the survey for march seeing slower growth than last year, but showing more confidence in the soft landing, and less concern, of course, about a recession than we have seen in the past two years. take a look, the recession problem bit has declined to 32%, the lowest since february 2022. well down from the high of 63% in november 2022. the problem with the soft landing is that 52%, up from 47% in the january survey, and 40% in july. here are the numbers. gdp, 1.61% expected. slightly below trend. but a lot better, we'll see in a second, than had been, the forecast before. with the economy going back to what's considered to be

potential next year. cpi comes down over a two-year period, to just about what the fed's target is, because of 2.5 on the cpi is equivalent to about the 2% on the pce. there's just 0.3 of a current uptick of the unemployment rate over the next two years. john donald writes -- >> well, we'll see about this. look at what had been the forecast for this year. it has come up over four separate surveys now. almost double what it was. really the first time we haven't seen a big slowdown in the forecast over the last two years. now, the current level, you see it again at 1.61%. one critical debate for the fed if the recent surge of

productivity, 28% hope it's the beginning of a long-term shift and 16% call it due to normal volatility. importantly, the average neutral rate for respondents, 3.1%, a bit higher than the fed's 2.5%, which is to say respondents don't think the fed is quite as tight as the fed itself believes it to be. >> all right. steve, stick with me. our next guest says the market and the fed are currently aligned on three cuts this year, but says it doesn't take much for the fed to scale back to two. joining me now is paul mccallie, former chief economist and adjunct professor at georgetown mcdunna school of business. paul, what's the big open question when we hear tomorrow from the fed? >> i think there are a number of them, most important will be what the results of the dot plot are. and it drives me nuts to have to say that, because i think the essential message of the fed is

pretty clear. and that came clear last december when the fed rhetorically pivoted and put three cuts into the outlook for this year. between then and now, the marketplace has been all over the place. but they're in alignment right now, they're in a really good place of alignment with the fed. so i don't think that the fed needs to change anything really in the dot plot. but because of how it comes together, you do want to have two fed participants move from looking for three to two. it would flip the median to two. but i think that if that happens, chair powell can clean it up in the pressure. the fundamental message from the fed is the same it's been since effectively he laid it out to the public in 60 minutes is that tightening is over, easing

coming, not too far away. most likely to start in june, and three cuts this year. and that is, in fact, my base case forecast. >> paul, as we get closer to june, though, does the language have to shift at all? if he says the exact same thing, does that feel like, well, maybe it's farther out than june? >> i don't think it will say the exact same thing, but to your point, there will be three sets of inflation data and job data between here and june. and they will need to be a little friendlier, particularly on the inflation side than they've been so far this year. but that is essentially the path. i think chair powell will note we've got three more looks at this whole thing, so he's not going to pound the table about june. but he's not going to push back against it would be my bottom line. >> steve liesman, how much of an issue, a sticky wicket is the

services inflation that we see being pretty stubborn here? >> i think it's still an issue, still something that he's going cite as part of the reluctance to begin cutting right now. i think that's going to be an issue. and also this level of confidence that it will take to get the federal reserve to cut is an interesting question. january and february are almost a complete reset, john. this is a bit like you're trying to pin down a wrestler and the ref says one, two, the guy gets up and you have to start all over again. we have to get three in a row here. we really haven't had it we've had a good 2023 when it came to inflation. things came down. but now we're kind of stuck. there's a couple of really interesting policy questions the fed has to make here. the most interesting to me is this one about the sacrifice ratio. essentially, how much is the fed willing to give up in terms of economic growth, in terms of unemployment to get to that last

part or the last one percentage point we need to get to the 2% target? i think that's a question -- it might be interesting to hear powell respond to that. >> steve, siis it me, a year ana half ago, people were saying the fed doesn't know what they're doing, soft landing is next to impossible, they're ruining it. yet here we are, and it kind of looks like people are coming around to maybe the fed is going to do what they said they were going to do, and maybe they haven't botched this whole thing, no? >> yeah. and i think that comes down to the question, john, of how much time the fed has to decide here. you're right, a lot of people were very wrong about the fed last year. they were not open to the idea that things were substantially different in the wake of the pandemic than they had been on previous tightening cycles. but it does remain a question

about how much time the fed has to get this right. there are companies that are going to have to refinance. but we still have those decent growth numbers built in, in terms of the forecast. but i think it's also important to say that some of those forecast jobs are contingent upon rates coming down. >> paul, what's the most concerning maybe is too much bias on it, but i'm looking at some of the consumer numbers, the employment, the labor market numbers and things loosening up a bit. what do you think is the most important thing that the fed is going to have to keep an eye on and consider over the next several weeks? >> interesting you said over the next several weeks. i don't think there's anything explosive going on, on the credit side of things. those are things that we monitor looking out over the next 6 to 12, 18 months. i think looking out in the weeks immediately ahead, the fed very

much does want to see in the next couple of series of inflation friendlier data and i think it will, including on the c pmpx i. because last month, each though it was greater than expected, we finally saw a crack in ownership equivalent rent or o.r.e. that was huge. so i think we're going to be tamer on the cpi data going forward, in part because of o.r.e. they will be focused on that from the standpoint of economic wonkery. and they will be focused on just how exuberant risk markets are. they have put in a huge amount of accommodation in the marketplace already. so i don't think they want the marketplace to run away from them again from here. so i think they will be looking at the data and also looking at the environment.

but more fundamentally, i think the decision has been made that they're going to start an easing process this year. in fact, chair powell told congress that. so i think the decision has been made, so there has to be some type of data that would change that core strategic decision that would disturb essentially the path that we're on for the cycle to begin here in the second half of this year, most likely starting in june. and if it's july, that's okay. >> right. well, we're kind of like kids in the back of the car, "are we there yet?" are we really going to start cutting? paul, steve liesman, thank you. following a year of major gains in tech, our next guest is sticking with that trade from here, but doing it in a specific way. for more, we're joined by the potomac wealth adviser's

president. mark, you're trying to get away from some of these companies that have been big tech players and make gone up a little too fast. how do you do that? >> well, you use the tried and trued principle of diversification. a lot of investors are not aware if they're in the s&p 500, they're in the triple qs, they own apple and microsoft and other big games, and they're massively overweighted. in the xlk, mike crosoft and ap are over 42% of that allegedly diversified tech etf. so we want to offer that same comfort of diversification, get away from the mag seven and use a more equal weight approach. first trust has a nasdaq 100 more than equal weight etf. this way we get exposure to the great industry of our time, not only great within itself, but

making tech-enabled companies great and we allow it to have a less risk profile and move away from the mag seven. >> how strong a gut do you have to do that, though? there's this russell 2,000 problem that things that aren't big haven't been performing well, especially when there are interest rate concerns. >> great point. these are also large companies, names we know. they're just not small and emerging technology. they're established tech companies that may be a little more overlooked. but on the small-cap trade, if this economy keeps going and the fed has to sit on the sidelines, that typically is a good environment for small cap. we think that small cap growth side would be a little better for that, because we are a little concerned about small value and their exposure to community banks. >> speaking of community banks, how do you view that and the

region al bank issues? we look across multifamily and office, and we see some spots of trouble. >> well, we are learned about small community banks. there's a couple of reasons. one is a massive structural disadvantage they have in the kst of deposit gathering. if you talk to bank presidents, they acknowledge a an internet based bank have at least a is00 basis point, if not 150 basis point advantage in gathering deposits. that will crush a profit margin when your coast of goods sold goes up. i think that's simple, people forget about it in banks, but that's how bank profits start. we also think the real estate exposure is a bit of a bubble. backs have been restructuring qu quietly, and we think small and mid-sized banks will face the bigger brunt of that pain.

>> catch out. showing the kre there. mark, thank you. coming up, nvidia trying to continue its record winning streak after the company unveiled its latest generation of ai chips. up next, when they're coming to market and speak with the ceo of one company that has a new partnership with nvidia and is on wall street's watch list for a potential ipo. plus, talking oil and gas. the ceo of slb, normally known as schlumberger. later on, the cbo will join us from houston. "the exchange" is back after this.

welcome back to "the exchange." nvidia unveiling its lateest ai chips. here's what the ceo told jim cramer about the investment behind the announcement. >> this will cost $30,000, $40,000. >> how much did you spend to develop snit >> the very first one, the rnd budget of this generation, is probably something like $10 billion. >> not million, billion. >> billion dollars. >> billion with a b. christina was at the conference for day two in california. christina? >> reporter: nvidia is not a chip company, it's "an algorithm first company." the ceo just finished up a conference down the street.

it felt more like he was positioning the company as a cloud service provider before all else. he said, "we've basically run everything." they provide the prebuilt ai models called nvidia infrens microservice, costing companies around $4500 per year per cpu. it is a reduring source of revenue and shows how they plan to monetize software. earlier and through the sound bite, jensen said that chip will cost between $30,000 to $40,000. but to follow up on the specific chip and if others would cost more, they wouldn't clarify. so we're not sure which chip he

was referring to. we should, as said on the recent earnings call, expect supply restraints. another important takeaway from his comments today was about the $1 trillion total addressable market. it's -- >> those were the comments that helped reverse earlier losses in the share price. the stock is still up 82% year-to-date? >> yep. fractionally higher now. this is the message jenson has been trying to hammer home for a couple of quarters. we heard it after earnings most recently, but he has a big stage to do it on now. it's interesting to understand what he's talking about charging customers per gpu, to keep their

software and offerings up to date with the latest technology, backward compatible. it's like apple's app store, right? you pay to be on it, you pay to remain updated, and it's an ongoing stream of revenue, doesn't have to keep on selling chips to make money. >> yeah, which makes the switching costs so high, which does not bode well for competitors in the market, which is why you saw the negative reaction in amd stock price. you had nvidia not only with the gpus but the software that's used by a lot of developers. now this entire package, you know, with prebuilt ai models that they're offering. the license we just talked about at $4500 per year per gpu. that makes it even more difficult for companies to switch. i thought it really telling that he said today, "we run everything." that's a bold statement, and maybe i guess a rethink when we just refer to this company as a chip company now when really

they are claiming they're more algorithm and software first. >> might be a little uncomfortable for aws and microsoft azure. catch more of jenson haung's interview tonight on "mad money" at 6:00 p.m. eastern with jim cramer. well, nitd is an investor, and my next guest just announced an expanded partnership with it at gtc yesterday. the current valuation of arnoun $43 billion. joining me now to discuss all of this, ceo and co-founder ali. good to see you. so many nvidia partnerships getting floated around out there. i saw snowflake had one, too. what's special about yours? >> customers are coming to us saying we want to build our own generative ai models. so there are those smart ones out there like chatgbt.

but enterprise wants their own to compete with their competitors and have their own ip. so we have built the most number of custom ai models, and we do that on nvidia chips. we're excited about the blackwell 200 coming out and many of the other movements happening in this gpu space. everybody is interested in building their own ai models today. >> are you comfortable that you see the limits of nvidia's ambitions here, and where it's safe to partner, versus where -- they're saying -- jenson is saying they do it all, are they going to do what you do? >> i think they're amazing at that particular thing. they do also many other things, but the time for ai is going to be gigantic. it impacts anything on the planet that's happening. so there will be room for lots of players. if someone should be worried, databricks is not number one on the list. >> i agree. that makes sense. a couple weeks ago, you were

saying that you expect the price of accelerators, just the chips part of what's being used right now to develop a lot of these models, you expect the price of that to come down in the next couple of years. is that still your expectation? because it sounds like part of what jensen is saying about nvidia, we do a lot more than just sell chips and people will need this technology for inferencing, as well. >> i wasn't commenting on how nvidia will do. i think nvidia will do fabulously. i'm commenting on the cost of gpus. the supply is increasing because so many vendors are coming to the market with their own variants. there's just -- there's been so much demand for these, and supply will increase this year. we're already seeing it when we talk to the folks that sell these. before, it was you have to commit to me and buy lots of them three years in advance and pay for it in 24/7. now negotiations are lightening up saying just commit to one

year, or buy it for six months and the prices have come down in the negotiations. so that is happening. now, nvidia is on a tear, and there's no doubt about it. >> ali, what industry do you expect we'll see the needle moving productivity gains in ai show up at the macro level first? >> it's already happening in customer service. that's the most obvious one, right? we're also seeing it now start affecting financial services. so financial services are using this generative ai model to sift through massive amounts of financial documents. s.e.c. filings and so on and just extracting, you know, is there a signal anywhere? can we improve alpha? insurance companies, they want to do underwriting and assess risks. again, these large-language models can sift through massive amounts of documents. classic ai, it's not just generative ai. a customer like rivian figures out how do you optimize the

battery of your car, et cetera. so this will impact every industry, but the ones i pensioned are the first ones coming up. >> i thought about communication in marketing when i saw ibm's layoff news. they didn't put it out there, but it got put out there maybe some of the people in those industries need to worry if generative ai can generate content. >> i think people got overexcited. this is like 1999. the markets price in the next ten years of innovation, and they said okay, we're creating super job, and all jobs are done by the end of to 23. none of that happened. so what's going on now? so i think this is a little bit of resetting happening in expectations. i think this is going to be amazing, just like the internet was. but it takes years for people to change their jobs, how they'll use this a -- adopt this technology. even if we make amazing revolutions in ai, if no human being wants to use it, you have

zero impact. so we have to get humans want to use it. >> speaking of expectations, could we expect databricks to ipo in '24 or '25? >> this is an interesting year, election year, a lot going on around the world. we have interest rates. they were supposed to lower them, but i don't know what's going on there. >> okay. dep depends on market conditions. who knows? ali, thank you. still ahead, the country's housing shortage is going to get worse before it gets better, according to the ceo of one real estate manager and developer. we'll ask him why, and what he's doing to take advantage of the trends he sees. that's when "the exchange" comes right back after this. than help you reach your goals. -you can make this work. -we can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

welcome back to "the exchange," everybody. i'm tyler mathisen with your cnbc news update. the white house said u.s. and israeli officials will meet early next week in washington to discuss israel's pending operation in rafah. the meeting comes after joe biden and netanyahu spoke on the phone yesterday where biden urged israel to allow more

humanitarian aid into gaza as reports of famine in the area have been growing. hawaii's attorney general is blaming the delay in the release of a report into the deadly 2023 lahaina wildfire on county agencies in maui. the first part of the investigation is now not expected until april 17th following delays in gathering key information needed for the report. the ag's office says it had to issue subpoenas to three county agencies over their slow response. and netflix is taking viewers back inside the huddle with a new football docuseries with the perspective of some of the nfl's best wide receivers. "receiver" will follow several pla players during the 2023 season. amman st. brown, he's a lion, i

knew that. john? >> so much easier when it was jerry rice. tyler, thanks. coming up, we go live to houston with the ceo of oil field services firm slb. his take on global oil demand, reducing emissions, and the role ai will play in the energy space, next. they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency. more benefits. more growth. when you realize you can give your people everything, and more.

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welcome back to "the exchange." energy prices hovering near four-month highs with both west texas and brent crude a little up more than a half percent today. let's go now to houston with brian sullivan who is with the ceo of slb.

brian? >> thank you very much. yeah, the company formally known as schlumberger, the largest oil and gas firm in the world, energy transformation. what is the relationship for your investors watching between the price of oil and your business? because i would view you as maybe the ultimate leading indicator of the energy economy. >> i mean, we need to look at the pricing as an indicator of future demand. and our view on the demand of oil and gas is very positive, and it has constructive implications to the longevity, the strength, and i think we benefit from longevity of the cycle, our exposure to the international markets, to fit

and to supply this demand that we see. so it can only be indicative of stable investment opportunity for our customers being exposed to technology. >> even the international energy agency, they just raised their demand forecast, probably reluctantly, for this year and for next year. so it sounds like you're pretty optimistic about energy, oil and gas demand. >> i think it has been, for a long time, and for decades, a direct correlation between the economic goal and oil and gas demands. i think this has, over time, transformed our efficiency and

there are energy still -- oil and gas is still the basis for hitting this energy goal and demand growth, and we are very pleased to be working on that. >> you stole my next question. you know, john, they were talking about nvidia today. we're talking about ai, artificial intelligence, the growth of data centers and the growth of energy demand. what's amazing is what i'm learning here, and it sounds like what you're saying, please confirm, companies like slb, we think of them as energy, but you're an ai play, i think? >> we are technology at the core. our dna is sound technology innovation. and we have a global footprint. so we have these two with a balanced strategy. coal and gas, then tdigital, an

capital efficiency and the next level of transformation, and energy. these are the domains we have invested the last 30 years. i think we have -- we didn't miss the ai confirmation. this is breaking a new paradigm of digital operation, being autonomously run, automated and setting a new benchmark when we introduce it. >> you have to do it responsibly, because climate, climate change, net zero, that's a macro theme here. a lot of people just want the hydrocarbon industry to go away, but it's not. nobody is saying it will, and anybody you look at, it's only going to grow. how do we do it, growing demand and supply but not damaging the planet more than we are?

>> our responsibility as an industry is to help accelerate the industry. today, the oil and gas operation are emitting, and are consuming quite a lot of energy to explore and produce and possess the oil product and the gas product we sell to the market. our first and bigger possibility is to work in partnership to accelerate. i think we have a more responsible future as an energy industry. i think we will be more balanced the way we pull out the oil and gas product, and at the same time, decarbonize oil and gas, with a net zero foot print for construction and pollution. >> everything.

>> this is the most efficient step change. >> olivie, ceo of slb, we appreciate you joining us. john, you see what we did there. i know you've been talking about nvidia and ai all day. this too is kind of -- this is the stuff that makes the stuff that makes the ai work. so we had to -- we're contractually obligated to mention nvidia every block. >> brian sullivan, thank you. coming up, joe biden opposing nippon steel's takeover of u.s. steel. the ceo of one u.s. based company touting their advantages of getting a deal done. the name that could prevail, next. and i want to draw your attention to kering, expecting revenue to decline about 10% from the previous year, sending softness in the gucci sales in

the asia pacific region, expecting revenues to fall 20% year over year. shares of its unsponsored adr down about 8% on thanet ws. we'll be right back. ♪ ♪ next.

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you see the dow near session highs. welcome back to "the exchange," everybody. let's get to some show and tell where we show you a chart and tell you a story. u.s. steel is down 15% since wednesday's news that joe biden opposed its takeover by nippon steel in japan. the president says it's vital to remain an american steel company. on the other hand, u.s. steel says the deal would benefit union workers, the american

steel industry and american national security. cleveland cliffs started all this by making an unso lessis itted buyout offer in august, that was rejected and resulted in a bidding process that japan's nippon steel won. but cleveland cliff's ceo is still holding out for a win here. >> i have full conviction that this deal between nippon steel and the union will never happen. we have an agreement with the u.s. government. we have the right to bid on their behalf. we understand the successorship clause. that's something that nippon steel has no clue about. and we are going to prevail. >> well, coming up, single family home construction rebounded last month as the weather warms up and demand holds steady. but one developer sees more supply issues ahead, even if mortgage rates drop. that's next when "the exchange"

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welcome back to kwts the exchange." the spider home builder etf higher today after the housing market shows more signs of resilience. february starts posting their biggest increase in nine months. and diane olic joins me now to look closer at that data. >> strong buyer demand pushed housing starts higher in february specifically in single family, rose to the highest level since april of 2022. up nearly 12% from january, multi-family up nearly 9%. while single family is up 35% from february of last year, multi-family is down about the same amount. and that's because there is an oversupply of rental apartments right now with record new supply coming online. now, mortgage rates were slightly higher in february than they were at the end of the year, but builders have been buying down those rates aggressively so they don't affect new home buyers as much as they do existing home buyers. building permits, which are an indicator of future construction were up just 1% for single family from january and stronger

8% for multi-family. compared with a year ago, single family much higher and multi, much lower. the builders said demand for single family was brisk, so it looks like we'll see stronger starts in the coming months unless there's some dramatic move higher in rates. jon? >> diana, is the incentive that we're seeing across different segments in line with those same fluctuations in demand, whether single family, multi-family, et cetera? >> incentives in terms of what? >> in terms of paying down the mort gauge rates for people. >> yes, absolutely. right, incentives for single family are your bind on the mortgage rates, adding amenities to the home and some cases lowering the prices. rental side, rents are moderating coming down a little bit. you're not seeing the concessions you used to see maybe one or two years ago. so, again, you're trying --

you're seeing actually more concessions than you would have one or two years ago. two years ago there was so much competition that rents were rising and the landlords didn't have to do anything. they might add the parking in for a couple months or free month's rent. we're see more concessions on the rental side. >> that makes sense. i was thinking of condos. that wouldn't fit. thank you. despite a strong february for construction, our next guest expects the housing shortage to get worse in the near term, even if mortgage rates come down. joining me is david o'reilly. howard hughes, develops, owns and operations mixed use real estate and commercial and resid residential. i want to start on incentives. across different markets an different price points you're on the higher end here. how much are you needing to incentivize? >> well, we're selling lapd to the home builders. our home builder partners selling the homes really only insent i have they're putting out there has been a rate buy

down. and most of that has been relatively modest. we have seen public home builders post margins north of 25%. some close to 30 for almost two years now. which is a sign of their strength. and it's representative of the supply/demand imbalance. we have so much more demand than there's supply. the amount of incentives a home builder needs to offer is not meaningful. >> what about the labor to develop that land. for a long time especially during the pandemic it was really tough to get the labor and materials needed to get the building done. how has that shifted? >> it's become a little easier. the labor is more readily available. the materials we need, 16 foot sewer pipes are not off the shelf at home depot or lowes, coming largely from overseas. we're able to get those materials at appropriate pricing these days. >> what's the power of cash in this market? i imagine if you need to borrow a lot to get a project done versus if you've got access to

capital it makes a big difference. >> yeah. we sit on large cash balances at howard hughes for that reason. being able to put more cash of equity helps us achieve loans in a difficult lending market. at much lower rates. >> you say you're seeing a lot of demand for the higher-end amenity communities where you have your pool and your fitness and whatever else right close to you and you're close to work. that's interesting to me. i don't know if it's unique to areas where you're operating because a lot of times in hot real estate markets you see people pushing out to the suburbs to get what they can afford. >> demand right now is quality of life largely driven to access to outdoors, access to trail system, great schools for their children and short commutes to work. as this return to office is continuing to take hold,having a five or ten-minute commute is so much different than an hour train ride is driving a lot of

buying decisions. we're seeing more and more folks moving into our communities everyday seeking that quality of life. >> is there a flip side to that where there are people who moved farther away when remote work looked like it was more of the future than it is? and now the demand has shifted? >> yeah. we have seen a remigration into these walk-able urban communities. bridgeland outside of houston, those live, work, play, learn, discover communities middle of the bullseye for consumer demand right now. >> there have been some stories out there some months ago about designs changing so that homes were smaller, so people would be able to afford them. are you not seeing that in the markets where you operate? >> no, we're absolutely seeing that. over the past five years the average home size has come down 8 to 10% is but still double what it was in the '80s. i don't know how you grew up, i had a bunk bed and shared bathroom down the hall. i think now everybody has their own on-suite bathroom, home office, three-car garage. consumer demand over the past

four years really exploded in terms of the size of the home. the price per square foot of the home hasn't meaningfully outpaced inflation. a lot is consumer demand, not just it costs that much more to build a home. >> brown stone and bed sty here, not a mcmansion. i guess it shrunk a little bit from the peaks but not to normal. it's great to have you and your perspective on what's happening in the housing market which affects potentially all of us. thank you, david o'reilly from howard hughes. as we look at the markets, there had been quite a rebound in the major averages, starting around 11:00 a.m. right up into the 1:00 hour. you can see there, the dow holding steady near the highs throughout this hour. but not exactly clear how that's going to end up. that's why you have to keep watching cnbc. that will do it for "the exchange." i'll see you back here at "overtime" 4:00 p.m. eastern.

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