for "nightly business report", i'm diana olick in washington. >> to read more about mortgage rates and where they might be heading, go to nbr.com. >>> that wraps up our special market sell off edition of "nightly business report." i'm susie gharib, thanks for watching. >> i'm tyler mathisen. thanks from me, as well. have a great evening, everybody. we'll see you back here tomorrow night. >>> "nightly business report" has been brought to you in part by. >> thestreet.com, founded by jim cramer, thestreet.com is an independent source for stock market analysis. the action alert plus service is home to his multimillion mo portfolio. you can learn more at the street.com/nbr. announcer: (♪ theme music ) (♪) matt elmore: welcome to imagemakers a weekly showcase featuring the best short films from around the world. stay tuned and enjoy the filmmakers of tomorrow today on imagemakers. imagemakers is made possible in part by a grant from: celebrating the vitality and power of the moving image. and by the: (♪ slow dramatic music ) (♪)

for "nightly business report", i'm diana olick in washington. >> to read more about mortgage rates and where they might be heading, go to nbr.com. >>> that wraps up our special market sell off edition of "nightly business report." i'm susie gharib, thanks for watching. >> i'm tyler mathisen. thanks from me, as well. have a great evening, everybody. we'll see you back here tomorrow night. >>> "nightly business report" has been brought to you in part by. >> thestreet.com, founded by jim cramer, thestreet.com is an independent source for stock market analysis. the action alert plus service is home to his multimillion mo portfolio. you can learn more at the street.com/nbr. [faint laughter]

for "nightly business report," i'm diana olick. >>> carl rigadona joins us to discuss his outlook for the housing market, senior economist at deutsche bank. what do you make of the conflicting data on housing? are we in recovery or not? >> i think we are definitely in recovery. but we have to be very disciplined at this time of year. because this is the low season for the housing market. activity's typically about 40% higher during those peak selling months of march, april, may, june and july. so what we're looking at now is really just a trickle of data, trickle of transactions. and it can really be distorted by things like the inclement weather that's been impacting much of the eastern half of the country from december into january and again into february. so i'm trying to stand back and not really cast judgment until we get a better look at things in a few months's time? that makes a lot of sense, carl. but when you look at the information we have now, as diana was just reporting, there's not much supply of homes on the market. and then on top of that we see mortgage rates are noct

diana olick has more. >> reporter: it's not this. it's this. stalling the housing recovery and raising red flags for the spring season. >> i'm having regular and ongoing conversations with my clients about the higher interest rates and the higher prices of homes. >> reporter: all cash investors push prices higher nationally by double digits last year. add to that a sharp jump in mortgage rates, and suddenly potential buyers are experiencing affordability shock. >> it's lions and tigers and bears. it's everything. i think affordability is one issue. we need plenty of home buyers who were interested last year but now concerned about how much more they'd have to pay. >> reporter: how much more? 21% according to a new report from realty track. the analytics company looked at the average monthly payment on a median-priced home. on a 30-year lonan. with rates from 3.5 to 4.5% that goes from $417 a month to $865. the payment jump is far worse in much of the west where sales actually fell the most in january. they fell the least in the frozen northeast

diana olick over to you. >> reporter: kayla, all based and what some call affordability shock in 2014. home prices shot up dramatically last year as did mortgage rates. as buyers come out of hiding into the spring market, finding it more expensive. how much? 21% according to be online sales and analytic company. looked at median priced home, 20% down, 30-year fix. 10% rise in prices and rates from 3.5% to 4.5%, the payment from $714 a month to $865 a month. some markets are seeing a much steeper jump in monthly payments in the 50% range. of course, those counties are in california, michigan and nevada. >>> we've seen home sales nationwide down for four straight months, and price gains are easing a bit up to 0.2 percent sequencetially. the bulls blame it on the weather. bears saying it's weaker affordability. that's why california is seeing such a huge drop in sales. down nearly 14% from a year ago according to the california realtors association. so on the bull side, zillow is reporting a rise in inventory. in 22 out of the nations largest housing markets, the inventory is much needed

diana olick is live with some of the details on that. >> reporter: time flies in the housing recovery, right? this spring marks five years since the obama administration launched its housing and mortgage bailouts and the mortgage modifications had a five year limit. the program didn't help nearly as many borrowers as promised. close to 900,000 did get permanent modifications with rates as low as 2%. now that rate will go up one percentage point a year until it hits the current market rate. what does that mean. the median monthly payment of a borrower in the program whose rate at the time was over 6% was slashed in half from $1421 to $773. now, each year, the monthly payment will go up by about $100. in total, around $200 higher a month when all is said and done. that's on average. treasury says it could be around $250. but you have to watch california, which had by far the highest number of government modifications, nearly 214,000. that's twice florida, which is the next biggest player. california had higher home prices and bigger mortgages, and borrowers there could see resets on ave

diana olick there.ure of the real estate market by asking those who quite literally live and breathe it every day and we've got both coasts covered. representing the east coast now, brian lewis, executive vice president at halstead property and on the west coast in san diego, broker jim cling. welcome to the program. >> thanks for having us. >> let me kick off with you, jim. we saw a graphic that suggested volumes were down most on the west. in fact, down over 7%. do you feel as if you've got a worse situation than arguably the east coast? >> well, the great news is the problem can be easily fixed. it's a -- when you see the sales going down, inventory starting to creep up, price will fix -- price will fix anything. it's a sign that the current sellers are too optimistic on price. buyers aren't going for it this year. last year when rates were really low, sellers got away with it. this year it's a lot tougher market and buyers are being a little more cautious. >> are you suggesting, jim, that the hype w

cnbc's real estate reporter diana olick is also here today. ivy, welcome. it's nice to see you again. >> great to be here. thanks for having me. >> a year ago on this program you said it was housing nirvana. what do you say today? >> i knew you were going to bring that up. i think nirvana took a pause. during that time house price -- home prices were surging and we had attractive affordability and a few months after i was on we had rates spike about 100 plus basis points and we saw a pause. the consumer was rationally responding to the prices and backup in rates. and over the summer and slower months we saw a pause. good news, scott, is that i think we're back to seeing very strong activity throughout the country despite the bad weather and nirvana is not far around the corner. >> new home sales up 9.6%. believable? ivy, is it a real number? >> you know, honestly, we don't put a lot of weight on the new home sale numbers. i think diana mentioned that earlier today. we do our own surveys and i would say that that number would not be correlated to what we saw

diana olick on the case. >> a wave of foreclosures may be about to hit the u.s. again but could be stopped if congress does something. if they don't, we'll see what the impact will be next on "power lunch." >>> welcome back to "power lunch." a stock we have been following all day, apple. carl icahn backing off his high profile campaign to get apple to buy back more of its stock. in an open letter to apple shareholders, icahn said we see no reason to persist with our nonbinding proposal, especially when the company is already so close to fulfilling our requested repurchase target. ica icahn's statement comes a day after iss said it recommended that apple shareholders vote against icahn's buyback proposal. where do analysts stand on apple? 28 buys, nine holds and two sells. tyler? >> thank you very much. >>> to the health of housing and without action from congress, the nation may be headed for a new round of new home foreclosures. diana olick is covering it for us in washington. >> short sales and mortgage principal reduction which helped millions of borrowers avo

i'm diana olick in washington. >>> now that the health care reform law is law, just how will the affordable care act affect your taxes next year? hear to help us get a head start is brian hale. he's with jackson hewitt. mr. hale, welcome. good to see you. before we get to some of the gnarly wrinkles, would you clarify a major change that has been in place for years and years and years? that is that people were able to deduct health care expenses. ones they competed 7.5% of their adjusted gross income. has that changed? >> it is if you're under 65. going forward you'll only be able to deduct those expenses if they exceed 10% -- however if you're 65 or older, you're subject to the old rules. if you're over 7.5% of your income. >> so i guess you would want to for lack of a better word so if you could, so that you would exceed that 10% threshold, right? >> exactly right. one of the things we have had to keep in mind here. including use the health care savings accounts, other things. this has become a much more complicates area. it's hard to give good advice without knowing specific conditions,

for "nightly business report", i'm diana olick in washington. >>> still ahead, it started with a change to aol's 401 k plan then the ceo put his foot in his mouth and reinstated the old policy. the move begs the question, how vulnerable are your retirement benefits? >>> wall street investors were cautious as they looked at the first public comments of janet yellen. she's scheduled to testify before congress on tuesday and thursday. lawmakers want to know how co committed ms. yellen is. >>> ahead of her testimony tomorrow, bond yields traded in a narrow range today as investors wait to hear what she'll say about the job market and the economy despite the small move. yields have fallen dramatically from the beginning of the year. back then, the ten-year note yielded around 3%. sarah eisen is here with what the bond market is telling us. what is it saying, janet -- janet, i've already promoted you to become the second head of the reserve. sarah, what is it saying. first they were saying stay away from bonds. >> we were all worried about higher mortgage rates and car loans, just the opposit

for "nightly business report," i'm diana olick in silver spring, maryland. >>> still ahead on "nightly business report," outside the box. can small tech start ups compete with the likes of microsoft, ibm and google? and transform the way companies manage their data? that's coming up. >>> iran is playing hardball as multinash tal multinational talks resumed in vienna. when talks opened today iran said it would not buckle under pressure from the u.s. and other western nations by scrapping its nuclear power plants. this has been a key demand by the six nations hosting the talks. >>> another global hot spot erupted today and markets are sure to keep an eye on developments overnight and into tomorrow. anti-government protests in kiev, ukraine turned violent tonight when riot police tried to drive two armored personnel carriers through an encampment in the city's independent square. protesters have been holding of there living in tents for about three months. tonight some of those tents were set ablaze. there have been reports of gun fire. and late this evening local time of more than a doze

here is more on what happens now is diana olick. >> here is a number for you, 2.8 million.hat's the number of short sales done since 2007. add to that hundreds of thousands of loan modifications where the principal amount was lowered. money that was tax exempt for borrowers. that exemption expired six weeks ago and has not been extended. b borrowers like tony are on the hook. he got his short sale approved but it would a month too late. he could owe the irs around $30,000 which he does not have. >> now with this debt relief act not being extended as of yet, i'm really nervous now. so i'm staying unlate p late at. just can't sleep at night. it's causing a lot of stress. >> now, remember, the banks were actually mandated to do principal reductions in legal settlements. that's why the foreclosure and delinquency numbers are down. loans in foreclosure down 28% from a year ago. if you think the crisis is over, think again. there are still 3.24 million delinquent loans out there according to black knight financial, plus 1.24 million in the foreclosure process. add it up, 4.48 mil

diana olick is on the case for us. what is he saying, diana?: truly it's chief commit jed based in san francisco saying while prices are 82% higher than other large metros, that gap existed well before the internet did. apparently tech just chose expensive markets because there were major universities there and highly skilled workers. they looked at the top ten housing hubs in tech markets, which include austin, d.c., the boston area. he found that asking prices in those are up over 13% you've over year officer average versus the 11.4% gained nationally, but those markets had steeper price declines during the housing crash and now fewer foreclosures than the national average. when you account for that, he says it's a wash. affordability is awful in san francisco, just 14% of home there's considered affordable, but that's not tech. it's lack of construction. big restrictions on new construction. raleigh and austin have nearly ten times the home building and are far more affordable. lots nor online. realtycheck realtycheck.cn realtycheck.cnbc.com

diana olicker looking at that beat. diana? >> that's right. talk to any real estate agent they'll tell you this mess around me is what's calling, causing weaker home sales. this winter compared to last winter. but the data doesn't necessarily support that. if you look at home sales across the nation, they're down everywhere, but actually worst out west where you don't have this weather impact. sunny southern california is seeing its worse winter home sales in six years. now, we did see a bump up in jobs for specialty contractors in construction. your plumbers, electricians and roofers. some are thinking maybe that has something to do with home repairs from all of this winter weather causing havoc on your home, but, again, that's just one small part of the economy that's seeing a little better from this winter, whereas realtors say it's worst because of that. when you tack to the economists, frankly, it's not the weather. low sly on the market. higher home prices. it is tight credit and investors slowing down in the market because there are few

diana olick as we eye the housing market.markets heading in the close with the dow off about 37 points now. a small decline for the s&p 500. the nasdaq is still hanging on to positive territory. but shy of that 4,200 mark. >> what do you think the next big thing in technology is in who better to ask than marc andreessen. he'll join us next. >>> and the united autoworkers union trying to score a major victory by unionizing a southern right to work state. uaw president bob king joins us exclusively telling us what this vote means to the future of the labor movement. >>> we want to know how you feel a win by the uaw could affect the automotive industry. >> we'll be right back. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise c

one thing that jumped out at me that diana olick hard, first time home buyers represent 26% versus aso we're going to discuss the buy side of housing. not the buy side like you're thinking. the bifurcation of housing. what's going on to create really two different housing markets. who are we going to talk about this with? vince. you want to make sure you see this one bottom of the hour, weather versus statistics. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. through sunday, save up to $500 on beautyrest and posturepedic.e savings go on at sleep train. get a sealy queen set for just $399. even get 3 years interest-free financing on tempur-pedic. plus, free delivery, set-up, and remova

diana olick tracking it in washington. >> reporter: sales fell to this lowest pace in 18 months, downoth month-to-month and year over year. blame it on bad weather? not if you're looking at the map. sales were down the least in the northeast and down the most in the west. realtors say that points directly to weak affordability, tight credit and a lack of supply which is quote, hindering buyer enthusiasm. also, these are closings so contracts from november and december, before the weather hit. sales are being hit the hardest on the low end of the market, as investors move out. first time buyers are now not picking up the slack there. their share, 26% is the lowest on record since realtors began tracking that in 2008. higher end sales are up but they are also a smaller share of the market. the only bright spot is that inventory is up 7% from a year ago but the realtors say the market is quote, underperforming. going back to that high end, real estate agent to the super rich, dolly lens, runs her own real estate firm in new york. she's joining us from the nyse. lots of data this week. wh

diana olick is in the house and she has been talking to the biggest name in the business, ivy zelman. >> the noted analyst famous for calling the top and bottom of the latest housing cycle, last spring she said here on cnbc that we were in housing nirvana. by fall she revised her outlooks down. today she explained why. >> i think nirvana took a pause, during that time house prices -- home prices were surging and we had very attractive affordability and a few months after i was on, we had rates spike about 100 plus basis points and we saw a pause. the consumer was rationally responding to the surge in prices, the backup in rates. >> she did not seem particularly concerned about affordability and she sees credit loosening a bit. she did say, however, she doesn't believe the government report today on a 9% jump month to month in january new home sales. her numbers say sales were flat, largely due to lack of supply which she added is about to change. >> what we hear from builders right now, they did not have enough communities to meet demand in 2013. they were caught by surprise by the su

diana olick is live with us in washington. welcome. >> reporter: this was not exactly unexpected after yesterday's huge drop in builder confidence. housing starts down 16% month to month. that's single family. even down nearly 7% from a year ago. everyone blames it on the weather but starts were actually up in the northeast even though that's a very small sample, yes, and down in the west where weather wasn't a factor in january. sure, weather makes it hard to start a house, but permits were down as well for both single and multi-family month to month, up slightly from a year ago. weather doesn't matter when you're just going into the permit office. so bill pulte said on "fast money" that we have just had exaggerated seasonality this year, i.e., the weather. i spoke to the ceo of red fin, an online brokerage, and he says no, this is not about the weather, it's about affordability. so what about all that pent-up demand? >> the answer to that question is that there must be low demand. that's what we're seeing. so we saw a huge s

here's diana olick. >> reporter: investors both institutional and individual put a floor on home prices and put housing into recovery, no question. now the concern is when will they dump out and what will that do to the market. more than 100 real estate experts and economists were surveyed and asked just that. 79% of them said that if institutional investors who bought close to 200,000 homes started selling their properties this year en masse, there would be a significant or somewhat significant impact on markets that saw the most distress. but the survey also asked when they thought investors would start to bail and the vast majority said not this year. 57% said three to five years from now, and 33% said six to ten years from now. just 4% said investors would sell this year. so they're not selling but we do know investors have slowed down their buying which is already causing some scary results. take phoenix, where sales are down 17% year over year and supply is up 30%. that's going to hit prices hard. guys? >> thanks very much. >>> let's move on to the investing edge. the dow right no

. >> you know, our diana olick who you may be familiar with covers retail here.as well if not better than anyone out there. and she says, you look at miami now, the cranes are back up. is it fair to say that you and your colleagues down there have learned from the mistakes that were made pre-bust? >> yeah, look. you hope so, right. the history of the real estate business in florida has been one of continuous ups and downs. it seems like a roller coaster. you look at our early developers here that founded our cities like coral gables and miami beach. most of them went broke with high expectations of this continuous expansion. we have been, i think, much more smart in this timing where leverage has not been used to the extent that it has been used before. today, in order to buy condominium here, you have to give 40% to 50% deposits that are nonreturnable during the construction of the units. so one of the things that was detrimental to us at the last expansion was leverage. i think we've learned and the banks have learned a lot from that recession and we're taking

let's get to diana olick in washington. this is the upside, isn't it? >> absolutely.s the upside to the downturn in the stock market and a chance to lock in on a refi if you haven't already. as investors head to the safety of bonds, both treasury and mbs, yields go down and mortgage rates follow. take a look if you will at last week, the average rate on the 30-year fixed fell from over 4.5% to 4.34% friday and today, sources at mortgage news daily tell me that rates for the very best borrowers could hit 4.25%. that's thanks to the weak report on ism manufacturing. a quarter of a point drop may not seem like a lot and really, on a $200,000 loan, it's about $30 a month difference in your monthly payment but everyone i talked to says it's the psychological impact on potential buyers and borrowers. that part is real, especially in such a rate sensitive environment now. it begs the question how low will rates go and how long will they stay? we can look to the friday jobs report for the answer there. if the report is weak, rates will likely go lower and vice versa. but expe

diana olick has that story. mortgage apps are dropping but rates are falling. >> it doesn't make sense. but the fight to the bond market sent yields down. mortgage rates followed the yields. the ten-year treasury on agency mbs pricing. look. the average rate on the 30-year fixed moving from 4 1/2% early last week to 4 1/4 at the beginning of this week. like skod said, it did not move mortgage applications much. as a whole, basically flat. up just .4% week to week according to the mortgage bankers association weekly survey. re-fis edged up 3%. they are still down nearly 63% from a year ago. applications to buy a home, down 4% week to week and down 17% from year ago. we know more than a third of today's housing market is running on cash. but we also know home sales have been slowing through the winter months. some of course blame the weather. others blame too high prices. this week we've got the full year numbers in and prices rose 11% in 2013 from 2012. that's the biggest annual jump since 2005. as for the week r

let's bring out diana olick to make sense of all this. i know you have pushed back against this idea that the weakness we have been seeing in the housing numbers is due to the weather. >> exactly. part of it is due to it and we will get that back when the weather warms up a bit. but really, what's happening is a weakening affordability. that's why that toll number really plays into that. toll has been doing very well. why? because they sell luxury high end homes. that's what's selling today. we had home sales in january above $750,000, jumped 20%. sales of homes below $100,000, down 19%. that's because the first time home buyer has dropped out of the market. those are not toll brothers buyers and the higher end buyer is able to get in. demand is there and they see prices going up so they want to get in now. but again, when you look forward and say well, how much affordability am i going to have later, toll brothers is saying wait, maybe there's a ceiling, how much can we raise prices because you are seeing the orders start to pull back as

diana olick, who never carries coupons, is live in washington. >> reporter: not true, exactly. but you're right about the weather. realtors are blaming the weather yet again for flat home sales in january. but not entirely. also, a huge lack of supply of homes for sale on the market today is really keeping sales far lower, especially in the west. take a look. pending home sales or signed contracts to buy existing homes fell the most. weather obviously not a factor there. sales rose from december to january in both the northeast and the south, where the cold hit hard. realtors are positively begging builders to add supply as housing starts are still historically sluggish. another factor, keeping that inventory low, negative equity, are borrowers still under water on their mortgages. 3.9 million came above water in 2013 thanks to fast-rising home prices. that puts the negative equity rate at just under 20%. that's the lowest since the housing crash. but economists expect that rate to head near 17% by the end of 2014 but home price gains are moderating and some markets will stay f

diana olick, big drop for home builder sentiment. the sector is down but what does it mean for home prices? >> reporter: well, look, we know that the builders have had to raise their home prices because they are facing rising costs for land and for materials. they are also facing a labor shortage because so many contractors got out of the business during the housing crash. all of that having an impact. but take a look at the numbers from today's report. a historic drop in builder sentiment, bringing the sentiment survey numbers into the negative for the first time since last may. that's the largest drop, that ten point drop, in the history of this survey going back to 1985. but look at the components of the survey. current sales conditions were down the most, down 11 points. then buyer traffic, down nine points. the one down the least, future sales expectations. but look, that's based on the visions of the spring housing markets and pent-up demand. but regionally, and the builders like to use a three month running average but if you

diana olick is waving me down. she's on set.oco. >> these are government numbers based on an incredibly small sample of homes for sale in january. they round up to the point that if you do the rounding and the math, they are actually unchanged and their margin of error is bigger than their movement. even ivy zelman who was on our air earlier doesn't buy those numbers at all. she says new home sales were flat in january. >> do you agree with that? >> they are super volatile numbers. new home sales, new home starts. i like to look at a three-month average year over year -- >> what does that tell you? >> about 7% up year over year which is still improvement but not the same at 10% up month over month. >> can i ask a dumb question? >> please. >> why do we even bring them up if they are unreliable? >> that's a bigger question for the government. there is a cottage industry of information surveys out there. >> go through the earnings reports, they are publicly traded home builders. >> right, but they only make up a small percentage of

. >>> welcome back to "squawk on the street" i'm diana olick with news from the national retailers.january and these are signed contracts to buy existing homes in january and they are still down 9% year over year to the lowest level since november of 2011. now the realtors are blaming part of it on quote disruptive weather patterns, but when you look locally, the sales in the northeast were up 2.1%, and up 3% in the south. the pending home sales down 2% in the midwest and down 4.8% out west where weather was not a c factor. and now why? the problem is very limited supply on the market, especially out west, and weakening affordability, and the realtors also point to tight credit and they need the builders to ramp up to have more inventory for people to buy, and the home sales out in january sign iing e contracts to buy existing homes were essentially flat. the street was looking up over 1%, but the december numbers were revised up slightly, and it had been a big drop in december, and still, a flat january. back to you guys. >> and diana stay with us, because with we want to bring in

lucky for us we have diana olick on on set working through the numbers. >> it's a good number becausetracts and not closings and the existing home sales numbers are based on closings. these are folks that went out in january and signed a contract to buy new home. supply is going up a bit. that's good. the builders are ramping up, what i'm interested, though, is the pricing, we did see prices rise higher and they had to raise prices because they are dealing with higher price for labor and land and supplies. and so, you know, they've had to raise their prices up and affordability has been tougher of late. but, again, this is a good number because we talked so much about the weather and how that affected folks and obviously we're seeing some good signs in january. >> it's an inflection, isn't it? we thought it would continue to go down and it spiked back up, almost as big a number as in october. >> we have to remember the new home sales figures are very volatile, a lot of folks don't buy into them because it's such a small samming supply. they are not like construction because they are o

diana olick, how much of that has to do with the rough winter on many parts of the country here? >> well, not as much as you would think, bill. look, we expected a drop, but certainly not this much. and even the home builders are saying you can't blame it all on bad weather. they're blaming land, labor, material costs, fast rising home prices, and, okay, a little bit about the weather. a record drop in home builder sentiment bringing the survey into the negative for the first time since may of last year. this ten-point fall is the largest monthly drop since the survey began in 1985. but look at the components. current sales conditions were down the most. 11 points. then buyer traffic down 9 points. future sales expectations were down the least, but that's based on visions of pent up demand and the fact that we are headed into the spring housing market. now, since this past weekend was the unofficial start of the spring housing season, we went to an open house in northern virginia where there was light traffic despite all the snow. buyers there, however, were just kind of kicking

diana olick joins us right now with talk on frozenomics. >> that's why this is turning into an epic bullr the weather is really to blame for the slowdown in the housing recovery or if it has something to do with something more serious which is weakened afordability. home prices shot way up in 2013, so did mortgage rates which together are making housing far more expensive. how much more? 21% according to a new report from realty track. they looked at the average monthly payment on the median priced home with a 20% down and 30-year fixed mortgage, a 10% rise in home prices and rates going from 3.5 to 7.5, that payment goes from $714 a month to $865. also michigan and nevada are seeing jumps. we've seen home sales nationwide down for four straight months. the good news is, price gains are are easing a bit and inventory is rising. that's what the bulls are harping on when they blame the weather. the bears say the weaker affordability is why california is seeing such a huge drop in sales, down nearly 14% in january from a year ago. we get the national existing home sales numbers for january

conversely, diana olick who is our housing reporter wants to know whether weather is the reason for theng market more broadly. can you comment on both? >> our traffic spiked in january. 70 million unique users up 52% year over year. it's very hard to know how much of that might have been driven by weather or something else. i mean, for us mobile is now two-thirds of our usage and i think a lot of people got shiny new smartphones or tablets over the holidays and in january they download their top apps in every major category and in real estate they download the zillow app. i think it benefitted in january from the mobile migration. it's very hard to say whether weather impacted us favorably or not. >> i'm curious about the weather impact on the housing market in general. you have terrible weather, mortgage rates set to rise in 2014. is there really enough job creation and income growth to balance that out and keep the housing market recovering in the new year? >> in 2013 home values appreciated 6%. in 2014 we forecast 5% appreciation which is still above the norm. the norm is kind of 2%