chooses profit over facts. watch book tv, every sunday on c-span 2 and sign -- find a full schedule on your program guide or watch online anytime at booktv.org. coming up, former military officials and others discuss the role of veterans in promoting democracy. life covered from the brookings institution 4:00 p.m. eastern here on c-span. we are joined by diana olick, cnbc's real estate reporter to talk about housing prices. diana olick, where does the rate stand right now? they are changing every day, what is going on? guest: mortgage rates don't move day-to-day but you can get an average. we have a guy who runs them for us.

we have seen this remarkable move higher since january. january we saw the 30-year fixed at re-percent. that was in your record low. came up in march and may. at june it was over 6%. it but i hammer unaffordability. came down a little bit in july and august. in the past week it shot up over 6% again. 6.25%. mortgage rates are a range, an average. it is double what we saw at the start of this year. host: why did she back up? guest: people say the fed raises rates. i will not bore anyone with details of how mortgage rates work. rates follow the yield on the 10-year treasury. the yield reacts to how investors feel about the overall economy. one the fed says we will get more aggressive, continue to raise interest rates, the

general population, that will hurt consumers. the chairman said that in his last speech. it may hurt consumers. it may hurt the economy but we need to pull back inflation. the markets reacted to that. yields went up and the mortgage rates followed. host: he said yesterday the federal reserve chair that the fed will continue raising rates until the job is done. guest: right. that was a signal that it will get a little uglier for consumers out there. that meant in the bond market investors were selling off bonds when yields go up. then the rates follow that. host: he said he's doing this, or they want to do this because i don't want high prices to become the norm in the american conscious. doesn't that bode well for housing? guest: it is a double-edged sword. everyone says rates are up and

home sales have started to fall at home prices -- we saw the first data that home prices are starting to fall. that is not a terrible thing. the housing market was completely on fire over the last two and half years, since the start of the pandemic. we saw prices go up 43% justice t -- just since the start of the pandemic. first-time time buyers fell out of the market. low income borrowers cannot get into the market. housing has become unaffordable. we really did need to bring it back. whereas, yes, higher mortgage rates -- this direction may pull more help into the housing market. host: where are prices falling the fastest? guest: in the markets that would highest the fastest. mostly on the west coast. san francisco, seattle, l.a. do you have not seen prices drop in the south -- you have not seen prices drop in the south. demand is still strong.

supply is still very low. supply is still low across the country. we are seeing prices come down a little bit. we are talking less than 1% from june to july. that was the first data point we saw from black night. that was the first monthly drop in almost three years. it was the largest monthly drop from june to july because the crisis -- prices almost always go up from june to july. that was a big red flag. something is going on nationally. markets are going to see no price drops. they are still way up from a year ago. they will be markets that will really overheat and prices will come down a little. host: i want to invite viewers to join in. i'm curious what the market is like where you live. tell us that and if you are buying a house, we want to hear from you.

we want to hear what it is like where you live. the lines are divided. start dialing in. diana olick and i will get to those calls in just a minute. what are you watching now in the coming weeks? what are indicators and what will they tell you? guest: prices and supply, those of the most important indicators right now. they play off each other. the homebuilders really pulled back and that was not a good thing. they saw demand pull back in june. they started to see fewer contracts being signed. baseload construction. that is the opposite of what we need. we need more homes. despite some demand pulling back, we have a very large housing deficit. there are all kinds of deficits ranging from one million to 5 million homes deficit. we need to see the builders build more. the prices -- i keep saying this

-- it will be nothing like the great recession went home prices plummeted. people went underwater on their mortgages and there was a massive foreclosure crisis. not going to happen. this mortgage market is much healthier. people have tons of home-equity right now. even if prices fall 5% on every home nationally, you would see less than 1% of borrowers be underwater on their mortgages. host: where are their home deficits across the country? guest: everywhere. look at washington, d.c. during the boom of the last two years there was nothing for sale. i don't know if you got the letters in the mail. i would be happy to sell your home and get you top dollar. it's happening all over the country. i have not heard of maybe -- maybe in the midwest a little bit. ohio and illinois.

those are some markets don't have quite the deficit in houses. everywhere needs more homes because we have more demand from millennials. they started buying homes later in life because of the great recession. that wave is coming to the market right now. they do have savings. they might be pulling back because they got concerns over higher mortgage rates and higher prices. a lot of them have the wherewithal to buy and could step back in. host: what role did investors play in the market leading up to where we are now? i'm talking about wall street chasing money and buying of homes. guest: there are several large firms. you see article saying wall street has bought up all the entry-level, lower-priced homes. first time buyers cannot get in because wall street bought them up. that caused prices to go sky high. wall street has bought a lot of homes but it is literally less

than 2% of the market. the big firms. there are investors that have 10, 20, 30 homes that have turned them into rentals. the rental market is exploding because you have a lot of rental demand because people cannot afford to buy. that single-family rental market in the build permit market, builders who were opening up entire single-family rental communities, that's a hot market right now. host: are the builders building the right kinds of homes? guest: it depends what you mean. host: condos versus single-family? guest: single-family is in most demand right now. condos are not in much demand. they are building homes, mostly in the south and west. they are starting to do a lot more in rental because they are seeing strong demand. these are communities where they have amenities. you have your lawn cut for you.

you don't have to worry about maintenance. you'd have to worry about if something happens because you are a renter. you still have a three-bedroom house in a nice neighborhood with a cul-de-sac and all the things you would get. host: they are building to rent because there is more money there/ -- there? guest: they are getting it returns. summer partnering with investors. you have builders like american homes for rent, a large single-family rental. did not used to be a construction company. now they are starting to build. host: diane in california, independent. good morning to you. your question or comment? caller: yes. i would like to address the investors. not being able to compete with the investors purchasing homes. i'm in the los angeles area.

i have a property i am an administrator of. and, i get calls constantly from investors just out of trying to keep americans being gable to purchase -- being able to purchase homes. single families are not interested. i'm not interested in selling to them. it is being downplayed. no one everyone's dimension it. a local channel did a story on a young attorney and his wife who were trying to rent a house. they could not afford to buy. the cheapest they could find in a decent area was like $4000 a month. this area -- i know that area. it is not a great area.

$4000 a month. this is the reality of where we are in los angeles. i hope -- host: i will have diana olick jump in. guest: first of all there are certain markets, los angeles is a competitive market. there are investors there. there are investors in areas like charlotte that are heavy in southern areas with a lot of demand. there is competition for lower-priced homes. i don't think people aren't talking about it. rent everywhere is skyrocketing. if you look across the nation, rents are up 10% from a year ago. multifamily apartment really shot up in major cities. especially in the sunbelt where you have demand. it is not so much investors are -- the rental market is so expensive because there is so much demand and so little

supply. if the investors who own these properties could not get that rent, they would lower it. it is supply and demand and that is how it works in the market. host: is inflation a factor in raising rent? guest: absolutely. you could turn that around and look at new york. new york city. some rents are moderating a little bit because overall inflation has made it so renters cannot afford higher rent. landlords don't have that pricing power anymore and they will put the brakes on it. there is so much demand. i go back to the little supply. you will see prices go up in rent. host: paul in germantown, maryland. caller: am i on? thank you for taking my call. the problem in the housing market -- i'm a builder. i build smaller homes. i see builders building massive

homes. if you build it so big, it will cost a lot. i had a question about up zoning and how that could affect the housing prices. if you can fit more houses on smaller lots and so forth. she said it is not as desirable maybe. i will take my answer off the air. guest: i would say i'm not sure buildings are building larger houses. if you look at the data, the average size has dropped nationwide. millennials want to, more environmentally friendly, efficient homes. maybe some of that in the larger homes in some places because of this new work from home and the fear we might be stuck in our homes again at some point. everyone wants to have enough space. i tend to see outdoor building. people building out. they have those tiny homes. i would say that the pencil with market you are in.

when you talk about density, it is a controversial issue. while i cover real estate, i also cover climate. there's a great argument to say if we have a housing deficit and the more people in the cities or certain areas that are in great demand, you want to build more density. you want to allow more high-rise apartments or put houses closer together. it allows for people to live closer together so there is less commuting, more jobs closer. it takes some of that carbon footprint out of the housing market. not a lot. it is happening in my neighborhood in washington. there is an argument over building high-rises on connecticut avenue and the houses just off connecticut have their own plots are upset about that. if you going to have more affordable housing and really focus on climate and how we structure our cities, you need more density. host: interesting you have the

combined title. what is the thinking there? are you always coming from that lens of climate? guest: i do now. i guess about four years ago i launched a series on cnbc that looked at the risks from climate change to real estate. there is such an overlap. real estate applies for -- accounts for 40% of global greenhouse emissions. you are real building and -- rebuilding and taking buildings down. we broadened it to everything. for a while during a different initiation there was not a lot of focus on climate. now there is, thankfully, and we are seeing progress. we have broadened our coverage of climate, which i'm thrilled about. so much of it overlaps with real estate. there is so much going on with cities and start up companies. i have another series that looks

at the start ups in the climate space looking to electrify buildings, looking to change how we do urban planning. a lot of that density issue comes into climate. host: this is a headline in the washington post. rising seas could swallow billions of u.s. acres within decades. -- millions of u.s. acres within decades. tens of thousands of -- if these homes are lost into the sea, there are other ramifications. property taxes. guest: what's amazing is people continue to move into these areas that are most at risk of fire, at risk of flooding. that is where everybody wants to live. on the coast and it is alarming. i did a story about how the government is finding the rebuilding of these disasters. what they need to do is stop funding the rebuilding and start funding the moving away, that

migration we call climate migration away from the riskiest areas, even though they may be the most beautiful areas. go visit for the day but dump at a house on the edge of the ocean or in california and a fire zone where we will have to clean it up. it is a danger to everyone. billions of dollars being spent because of these climate disasters. it is rising every year. we see another record level of how much that disaster is costing. you need to see more climate migration, which we are seeing in some areas like mississippi and louisiana, the river areas. you are not seeing that away from the coast. we are going to be forced to do it at some point very soon. host: 2050 is the your mentioned in the washington post article. john in georgetown, texas. democratic call. caller: how are you? i have a couple of different things.

in georgetown where i live they are building entire housing communities unsold. with expectations they will sell. georgetown is a suburb of austin. everybody from tesla, facebook, they are all moving here. there is a lot of need for housing. they are not even waiting for the houses to be sold. right next to me in the subdivision, huge subdivision in texas, they are building an entire community. probably about 200 homes in the community. they are not even sold yet. that is the first thing i want to say. the second thing, i heard in the last year -- i was born and raised in washington, d.c. i inherited a home in washington five blocks from howard university.

i was going to have the house renovated and use it as a rental property for an investment property. something's happened. plus, the distance i'm away and the ability to keep up with it, i decided to sell it. it is right there one block off the u street corridor. a prosperous area where people are trying to move. it is for sale now. it was put up on the first of september. i anticipate this house, which my grandfather bought in 1955 for $17,000, and is listed for $645,000. the house next door sold for $930,000 in june. i am looking forward to that,

selling it. i guess the d.c. area is a totally different area. you cannot just go out and buy five acres and build like you can in taxes. guest: diana olick? guest: i'm guessing that house in howard university area will sell really fast, even if it does need to be gutted. that is a very hot area. good luck with that. you were talking about the austin area. i was there last week giving a story about a massive community, 7000 homes on a geothermal grid. it was the whole climate and be listed convergence. i'm surprised when you say none of those houses are sold. whisper valley was sold out. they had contracts on homes not built yet. you are right next to the tesla giga factory, which i had never seen a building that large of my life. we kept driving and driving and driving and there are thousands of workers. not to mention austin has been

pulling and tech workers for the last several years from all over the country, especially california. the housing demand in austin and the outer area where you see massive communities built, that will sell. i will not be concerned they are building spec homes that sit here and not sell. they will because the demand is just that strong. the supply is very low. that is why prices jumped so dramatically. all real estate is local. the house in will sell and a nanoseconds. the houses in austin will do well as well. host: the geothermal grid. guest: this was so cool. they built the grid before any of these homes are built, and when it is done in 10 years they will be 7000 single-family and multifamily homes. what the grid does is it uses the temperature of the water underground, which is always stable. 30 feet underground you have

basically 72 degrees. by drilling down into that and pumping water into it, you pull the temperature up. if you circulate it to this piping in every home. they have a drill spot in front of it, even the plots that have not been built yet. they pull the water up into the homes. it heated and cools it. you need electricity to pump it up at every house has solar. you are heating -- your heating bills is next to nothing. a woman said she doesn't have an energy bill at all. the pump and the house was the hot water heater or a furnace. very small. it cuts back massively on greenhouse gas emissions. it uses so much less energy. it cost the homeowners nothing to heat and cool their homes. more importantly, the electric grid should go down like we saw in texas with that ice storm,

without heat and water, this community will not be affected. even if they lose electricity to run the water up, it's only at night. when the sun comes up, solar panels will run the geothermal energy. it's amazing. most homes had tesla battery

>> i would say that would be looking for low income affordable housing, they're not going to be buying homes because most of them don't have the income to do that. we do have a very shortage of affordable housing and affordable multifamily housing, few talk to the builders, they say it is really hard, you can pencil that. what they mean is the cost of the builders are so high because of inflation because of supply chain issues, because of labor

issues that is what they keep saying, inflation cost and still the ice of lumber is off the charts. in order to pencil a large apartment building they need to be able to charge a certain rent so that they can pay back what they took out. they simply can't do it on the affordable level now you need the government grants to fund that. we are seeing more of that under the biden administration but it is not nearly enough to get as much affordable housing, built. it takes a long time to build a multifamily apartment. it's a supply issue that we are not there yet. host: what about the ready-made houses? and also the tiny homes? guest: tiny homes are kind of a fad. they will not solve the problem though we are seeing what they call of the 80 use, the accessories well u.s. units -- one that units. some people are saying though

should be used to solve the affordable housing issues. and you are seeing more construction of homes, homes built in factories and even apartments built in factories, that is not a climate issue because it is much more climate friendly to build in a factory and then take that apartment building or whatever the mobile units, take them, piece them together on the party and do that. you are seeing some of that, not enough of that. we are doing a story for our clean start series about the first company that is going to be building large-scale, 10 to 30 story apartment buildings in units that they will bring to the site and put together. you need investors. they have big investors behind them but they're getting off the ground. it's coming but it is not there yet. we just need so much more formal housing. host: democratic color from colorado.