diana olick. rising home prices and low inventory, it could keep home buyers from moving in this spring, so is this a sign that homes are becoming less affordable for the typical buyer? joining us now, spencer rascoff. you heard what diana had to say. would you consider this a buyer's or seller's market? >> it certainly depends on where you're looking. certain parts>oóoóow÷÷ of theç are buyer and certain parts are seller. the thing missing from the conversation so far is the impact of limited inventory. 19% of americans are a mortgage are still upside down and 38% are basically in a negative equity position. they can't list their home because they're upside down on their loans. therefore, there's just limited inventory and that inventory is not enough to satisfy buyer demand and that's why home prices have spiked and that's why then creates the sticker shock because home prices have spiked because there's limited inventory. >> sounds like a very circular argument. what breaks that cycle and gets

diana olick. thank you for being here. >> thanks for having me. >> the march numbers, that was a bit of a setback. what happened to those existing and new home sales? >> well, really we expected to see a bump up in march because we blamed so much of the weakness on rough weather during december and january and february. we thought when spring finally came we would see more people out. demand was just continued weak. we saw it in existing home sales and basically flat month to month. the real kicker was sales of newly built homes really plummeted. those are based on signed contracts in march. folks looking to buy a home and the demand wasn't there. >> usually you see higher prices because there's so much more demand. with that demand dropping off, do you think high prices should come in there? >> the prices will moderate a bit. this has been an incredibly change recovery because this housing crash was so unique. prices were jacked up last year by investors on the very low end of the market. it wasn

i'm diana olick in washington. >>> maryland lawmakers are trying to help some of the have-nots. they've easily passed a bill to raise the state's minimum wage to $10.10 an hour by the year 2018. it's expected to be signed into law by maryland's governor who made raising pay levels a priority this year. the $10.10 minimum matches a measure passed in connecticut last month and it's the same amount president obama wants to establish as a federal minimum wage. >>> and the president's signature legislation the affordable care act is getting some credit for putting more americans on to health care plans. a new survey from gallup says the percentage of americans currently without health insurance dipped to a six-year low thanks in part to the law. black and low-income americans saw the biggest declines in the uninsured rate with drops of more than three perch points in the first quarter of this year. separately, the government said payments to insurers for 2015 medicare advantage plans would rise nearly half a percent instead of falling tlm 2% as originally thought. >> how safe is your

diana olick is here to explain. diana? >> mandy, they are unwrapping the boats i swear there are some cherry clos blossoms coming out. spring is here and summer around the corner. last year we saw a big jump in jakz ho vacation home sales. the highest share since the peak in 2006. although we are still one-third off that peak. all of that activity bumped prices of vacation homes up 12.5% year over year. of course, 38% of all buyers were all cash. so sales of vacation homes, of course, translate into more vacation rentals. i talked to the vp of home away, a vacation rental site. john gray said more than half of their vacation home owners say they are already booked up for at least half of the summer. better get moving. interestingly, he says vacation homeowners are getting younger, taking advantage of the lower prices and very low mortgage rates and buying to rent for now but renting for retirement. that is, they intend to use the homes later for their own retirement. we've got plenty more of the numbers online. realtycheck

diana olick has that for us. >> that's right. the u.s. ownership rate fell to 64.8% in the first quarter of this year. that's the lowest level since 1995 and it's the first time we've seen it cross below that 65% rate. this number doesn't usually move very much quarter to quarter but it took a big drop down from 65.2% at the end of last year down to 64.8% and it's particularly interesting given your interview earlier with robert shiller who talked about how prices were so high, but sales were lagging and he talked about investors in the market that were not speculators but that had come in and really put a floor under his market. investors own these homes. americans are not opening these homes. they are not coming back into home ownership the way we expected and as those investors pull out if we don't see the sales from regular buyers come back, we could see yet another downturn in housing. again, 64.8% the lowest level in 19 years. simon? >> diana, thank you very much for that. diana olick. up next on the program, it's been a rocky year

joining us is our own diana olick and author of "foreclosure nation" and also here in the discussion,onomist. diana olick, i guess what we're saying as prices rise some people are being priced out of the market and homeownership is going down. is that was going on? >> what we've been talking about again. price gains with r a double-edged sword. yes, it's good that we're getting value back in the real estate, getting people back from under value and bringing them into a positive equity position and allowing them to possibly sell and at the same time with higher mortgage rates and higher necessary down payment and higher mortgage insurance premiums, affordability is really taking a hit and you're seeing that in the sales. >> sherry, do you think this means there are people who are going to be structurally priced out of housing market who might own a home in this market and won't today? >> absolutely. we're seeing that particularly from the first-time buyers, many of whom, 5% more who are living with their families, who have about 2 million less household formations for that reason. the

diana olick and steve liesman join us now. diana, to you first on what was an ugly number. >> yeah, two words -- sticker shock. i can't tell you how many times i've heard that from potential buyers and real estate agents, and today we saw it. 14% month-to-month drop in newly built homes. sales down 13% from a year ago, and the drop across the nation. the worst out west. here's a hint why, because that's where prices have dropped the most. the median price nationwide in march $290,000, and, yes, a record. builders blame higher costs for land, labor, materials, but they're just going along with the existing home market, too, where prices are way up, as well. i ran a price check on the big builders just for fun. pulte, lennar, d.r. horton, all of them jacking the average price up in the double digits. granted, the higher end doing better. but that is not all of it. builders can blame higher costs, but as we've said over and over, this is about zero supply on the market. investors ate it all up. jacked up the prices with cash. and

diana olick has some of the details. >> not good at all. right on the heels of a poor showing for existing home sales, newby built homes surprise down. these are signed contracts in march, not closings, so folks making that decision down 14% from february, down 13% from a year ago. i'm laying it all on price. weak affordability. you heard me say it last year, as prices soared far faster than job or income growth thanks to those cash investors. not sustainable. now it comes home to roost. the price hit a record $290,000 in march, builders blame higher costs for land, labor, materials and low supply. housing starts are way below where they should be. we told you last year some builders actually admitted to holding off on starts in order to gain that pricing power. simon, back to you. >>> the new uproar against bill ackman. did his play on allergan cross the line? >>> plus coke cola with my good colleague sara eisen. >> a big shareholder meeting is under way. the ceo is addressing the crowd. and some of the drama in this meeting, after the bre

diana olick joins us with more. >> reporter: a lot of folks thought that the housing recovery would weaken rental demand and in fact, that sentiment hit the apartment reits pretty hard last year. investors were concerned about overbuilding. fast forward to the first quarter of this year. rental demand is still very strong. vacancies down 20 basis points to just 4% according to reit. rents continue to grow up over 3% from a year ago. they would be higher but landlords say that weak income growth is holding them in check. so with all that, it seems that investors have come back to apartment reits this quarter with a vengeance. the sector returned 12.75% in q-1 making it the top yielding of all commercial reit sectors. take a look at essex, avalon bay. there was that concern about overbuilding but demand so far is meeting that supply. as for potential buyers, we are hearing that there's a lot of buyer traffic out there but those potential buyers are just not signing on the dotted line. >> people quite frankly came out and got sticker shock because they are coming out to shop now or they came

diana olick, how is this related? >> reporter: well, look, millenials in general are your first time home buyers. they have been largely left out of this housing recovery. why? because they are dependent on mortgages and mortgages are much more expensive today than they were during the housing boom. not in the rates but because you actually have to put money down today and pay that full rate up front. imagine that. add to that also that home prices have been rising very quickly, up 12% from a year ago, but wages are up just 2% from a year ago. millenials, as we have been talking about, do not have the best employment rate of the adult group. so that makes homes particularly unaffordable for them. but then again, affordability is actually shrinking for everyone right now. in fact, in seven major american metros, more than half of the homes currently on the market are unaffordable for local residents. that's according to zillo which looked at incomes as well as the median home prices in those markets. and among the 35 l

diana olick, in d.c. diana? especially since we were expecting a bounce from better weather and construction starting again in the spring. we know they had a bad winter and saw starts fall blaming weather. but this is a huge miss. what is the price now 2.90. >> okay. . pricing power. that's the biggest one. we were talking about the builders they have trouble with land, labor, supply costs. they bumped prices up to 290,000 as the median price in march this year. that's way up from 257,000 last year and that could be your trouble with home sales right now. that is, costs. people are simply not able to afford these rising prices in the home sales. ed a as we look at those prices and compare what we saw in existing home sales, home sales very flat because there's not enough supply out there. builders are not building fast enough. the realtors were begging yesterday for builders to ramp it up. and citing the fact that builders did not have enough labor to do what they needed to do. to see the new home sales numbers

diana olick joining us now with some surprising details from this part of the mortgage market. a new report saying nearly half of all home sales are in cash and that mortgage lending is now at the lowest level in 14 years. that from black knight financial services. blame some of that on a plunge in refinances due to the jump in rates last year. refi applications are down 67% from a year ago, but to buy a house those mortgage applications are down 17% from a year ago. now i spoke to paul miller at fbr who has been revising his numbers down for mortgage volume every month. he was at 1.5 trillion worth for 2014. now he's down to 1.1. compare that to 1.9 trillion worth of mortgages made in 2013 so besides higher rate, what's the problem? credit standards which usually come down when refi demand drops off. it's not easing. only about 20% of 2013 loans went to borrowers with a fica score lower than 720. despite what we heard of wells fargo dipping back into the subprime, that's a small subset only through a. miller says other banks said no way will they go below 700 fica because they

i'm diana olick breaking news from the realtors, existing home sales in march barely moved, down 0.2%illion units, home sales down 7.5% from one year ago to the slowest pace since july of 2012. what's interesting in this report is the regional divergence we're seeing in home sales. sales popped up 9% in the northeast and up 4% in the midwest but they were down 3% in the south and down 3.7% in the west. why? prices. prices are jumping much higher in the south and west regions that's hitting affordability and dropping sales. prices gains not so big in the northeast and the midwest. that's why you're seeing sales coming up. speaking of prices the median existing home price in march was $198,500 up 7.9% year over year. that rate increase is slowing a bit. we were seeing price jumps in the double digits over the past several months. that's coming down. again, though, homes in the lower price ranges are really falling. sales down 18% in homes priced under $100,000. what's selling? the million dollar homes. inventories are rising slightly up 3.1% in march from a year ago. sara? >> thanks ver