diana olick has that story. >> millennials, they're just not buying homes the way previous generations did at their age. >> currently i'm not sure how long i'll stay in the city, but also, i need to save up money to at least have a deposit. >> the average age of a first time home buyer is now expected to jump to over 34 according to zillow. it may seem like a small jump, that would keep homeownership lower, keep rents higher and could impact sales of home goods. because the time for owning and renovating would be shorter. >> there's been a great delay for younger home buyers. they're doing a lot of things later in life. buying a home later, getting married later, having children later. higher debt burdens, higher unemployment and higher wage growth. >> and higher home prices. each $1,000 increase in the newly built home forces 206,000 potential buyers out of the market. that's according to a new survey by the builder. >> the cost of living has gone up substantially, and i think buying a house will pose an obstacle for many people in my generation. >> mortgage rates may be low. bankrate

diana olick explains. >> reporter: if your home sits by the ocean, a top a fire prone canyon or even in a not so nice neighborhood, you probably know you're paying more for homeowners insurance but something closer to home may be driving your monthly payments higher, your personal credit score. >> insurance companies use credit scores because they found a statistical relationship between a consumer's credit score and the amount of claims and the severity of claims they file. >> reporter: homeowners with poor credit pay 91% more for homeowners insurance than people with excellent credit. homeowners with medium credit pay 29% more. one of the biggest insurers state farm do factor fico scores into the rate. there is an undeniable correlation between credit information and insurance risk. she could not say how much in dollar terms, though, a poor credit scores could raise insurance. >> consumers need to understand not every insurance company is going to factor credit the same way. so while one insurer may factor it very heavily, another may not. >> reporter: the rate changes vary state t

for "nightly business report", i'm diana olick in washington. >> to read more about the hot market for apartments, head to nbr.com. >>> now another beneficiary of the housing recovery is home depot as more americans fixed up their homes and yards, home depot shares rose more than 5% today closing at a new all-time high, $88.23 a share. courtney regan has more on what is behind home depot's strong earning's report and what is ahead for the do it yourself chain. >> reporter: retailers may be lagging, though far from the case with the world's largest home improvement store. home depot built another strong quarter straight through and all around improving profit and sales above expectations, posting record customer transactions, strong traffic throughout the store and across regions, a stark contrast to many other retailers' reports. home depot executives attributed the sales strength to new store layouts, including the core of the store and demand for spring m merchandise and appliances like counter top and window instillation. >> people had not put very much money into their homes during

for "nightly business report", i'm diana olick in washington. >>> coming up, if you're like many of us, you probably have several passwords for your various online accounts, but with security in ever increasing concerns, is the era of the password dead? >>> facebook is looking to make your personal online information secure. the social networking giant is buying a company called private core, which helps protect commuters and data centers that power internet services from hackers and harmful spyware. no terms of the deal were disclosed. >> securing data may be more important than ever after russian hackers store more than a billion confidential user names and passwords off thousands of websites. that's raising questions whether the era of the password may be over. eamon javers joins us now from washington. are passwords passee? >> reporter: passwords may be about to be a thing of the past there is a major cybersecurity conference going on right now called black hat and death conand the big top pick of conversation, how will we get consumers to the point they don't have to remember five

diana olick explains the disconnect. >> more than two thirds of the 30 units going into this townhouse complex just outside the nation's capitol are already sold. two of them this past weekend. that developer bob young says is because he picked the right location for the right buyer. >> the after market is exploding. every time i look around, there are people like me thinking why do i need the big house in the suburbs any more. >> these units priced at around $1.4 million are taylor built for baby boomers. while construction is rampant targeting younger millennials. >> you have to be an eternal optimist. i am. i believe well located housing will continue to sell. >> and he's not alone. a monthly home builder confidence index surged in august, to the highest levels since january. it's three components all gaining, current sales and sales skpexpectations with prospectiv buyer confidence gaining. >> the market is cooling off, all that optimism last year pushed home prices too far too fast about. >> i think a lot of it is attributed to the fact that in 2013 there was a robust energy in the

diana olick explains. >> reporter: when this northwest d.c. home sold in january, it definitely didn't look like a million bucks. in fact, the buyers, real estate agent crystal get and her contractor husband eric, paid about half that. >> it's definitely a tightening market. you know, sellers are wise to the fact that they can get a bit more for their house. >> reporter: so they focus on the high end. and it's paying off. today, fully transformed and expanded, this four bedroom, three bathroom home is under contract for nearly a million dollars. >> it's like any business, really. if you go after, you know, the small individual clients where you have to do 100 accounts, right? or do you go after, you know, as i used to say in the business world the white whale where you're getting five or six clients but your profit margin is higher. >> the house needed a major gut job. but it was in the right d.c. neighborhood, where demand is high, and prices are still gaining fast. they paid about $535,000 for it in january and put a whopping $250,000 in to

diana olick is reporting on changes in the market, but first phil lebeau on a big problem when it comes to borrows in the auto second ovmt. >> in the future when it comes to the auto industry. others are say there's an up tick here, but let's not get carried away. more than 70%, there was also an increase when it comes to 30 and 60-day delinquencies. it's the subprime markets, that's what -- the auto loans surges in the second quarter. 19%, oh, my goodness, that's a lot? it's not as much as it was in the recession. 22, 23%, that's why when you take a look at shares of the auto maker, people are saying, keep an eye on the subprime auto loans. under the delinquency rate, he tried to say as well as the people who had their vehicles repossessed. it is worth watching, because if that ticks higher in temples of repossessions, tyler, that's when the lenders get spooked and they start to pull back. >> you bet they do. phil lebeau, thank you very much. from subprime loans in the auto markets to new regulation that would prevent the same, a meltdown in the mortgage and housing markets. diana olic

and our diana olick has the surprising details. diana?well, kelly, you're right, house flipping was huge during the housing boom. it was gone during the housing crash. then it came back again about a year and a half ago, as prices started to jump up. now the price gains are easing, so house flippers are focusing on this, the million-dollar flip. this house was a total gut job. it was basically a disaster area, but it was in the right d.c. neighborhood, where demand is high and home prices are still rising fast. so, real estate agent crystal getz and her contractor husband, eric, paid $535,000 and then put about $250,000 into it after that. a high-stakes risk that paid off. >> it's like any business, really. do you go after, you know, the small, individual clients, where you have to do 100 accounts, right? or do you go after, you know, as i used to say in the business world, the white whale, right, where you're getting five or six clients, but your profit margin is higher? >> now, house flipping, which is buying and selling within one year

diana olick has that story. >> reporter: apartments, warehouses, officers, even retail malls, commercial real estate is climbing out of the recession with a vengeance. >> i cannot remember a time when you had such a cstrong fundamentals and disciplined supply, good demand and accommodative market. from a fundamental perspective, we're relatively constructionti on real estate and commercial real estate specifically. >> reporter: u.s. equity up around 15% year to date with a dividend of about 3.5%. compare that to the s&p 500 up around 4% with a dividend yield of 2%. >> low interest rates are positive for reit because they offer an attractive yield alternative relative to treasuries and you have a growth characteristic that will go up and increase versus a fixed return over a period of time. >> reporter: apartments are still a top pick despite concern last year of over building. avalon bay, equity residential to name a few fueling the 25% year to date jump in this reit sector. freddie mac reports the supply of units is being absorbed and point to nearly 4 million potential households that

fannie mae has been speaking to diana olick, or the chief economist has been speaking to diana. what is he saling? >> reporter: well, he doesn't call himself a bear, but he does say, quote, i am a realist. fannie mae's chief economist downgraded his forecast for the housing recovery dramatically. >> we have looked at a combination of the research we have done on the demographics, and then looked at the mechanics of the construction space and looked at what some of the boomers are doing, and we concluded that people are too optimistic about whether or not 2015 is going to be a breakout year for housing. >> he says it won't be. so out came the ax in august. duncan dropped think forecast for single-family housing starts. he dropped the forecast down by 17%. he cut his forecast for new home sales by 16%. he cut his forecast for existing home sales by 2%, and for mortgage originalationses by 4% from july's forecast. >> it's not because we're pessimistic. it's just that we feel like people are overestimating the contribution that housing is going to make, because they haven't studied

diana olick is in washington. >> tyler, this is a tricky number. it combines both sippingle family housing starts and multifamily apartments like this one. so let's break it down, shall we? single-family starts we're up 8.3% and up 10% from a year ago. multifamily against mostly those apartment rentals, up 33%, month to month up 50% from a year ago. where? the big construction jump was in the northeast, also in the south, and midwest did take a hit. west is seeing a jump, because there's so many supply, but construction is really booming most in markets where most of the activity is in that multifamily. this is a new report from trulia, new york, boston, houston, northern california, these are directed at young mill lennial getting ready to resident and downsiding baby-boomers. that's why you're seeing the apartment reits hitting new all-time highs today. they're significantly outperforming the s&p. now, we called this reit play two weeks ago right here on "power lunch." if you missed it and want more, it still lives online. we have to keep in mind

back to you. >> thank you so much, diana olick. >>> some of the big headlines.ime high, nearing milestone level of 2000. the nasdaq setting a fresh 14-year high. goldman sachs one of the top gainers, hitting seven-month high as it settles a lawsuit p powellty group buying real estate assets of dominion homes. >>> kicking off the week in the green across the board, you see the s&p 500, less than -- it's a half i pineoint away from the 2 mark. nasdaq fresh 14-year high as we speak. talk about it. the president and cio of castle mark management, scott wren with wells fargo adviser. the s&p looks like it wants to test that 2000 mark what happen significance is that level for you? >> well, you know, i look at that as just a number but it's going to test it. while we're talking about here, it may trade over it and certainly i think we're going to trade above it here before this rally's over because i think not only through the end of this year, but likely through the end of 2015, i think this market has more upside. so, we're trying to get our clients fully invested h

diana olick has the story. hey, diana. >> hey, certainly a question.e august number in for apartment reits and the numbers continue to defy gravity. multifamily reit returns up 29% year to date. three times the gain on the s&p and 67% better than the combined all reit commercial index, of course from the industry association. now, this as rents continue to rise and vacancies drops, household formation up in the second quarter of this year all on the rental side. that's driving development. development that just won't stop. multifamily starts in july, up nearly 50% from a year ago. and permits, an indicator of future construction, up 15%. so are we overbuilt in this sector and are we overbought in these stocks? actually, if you look at 2008 to 2011, we were underbuilding and we have underbuilt by several million apartment units, if you look at geographic, demographic dema demand. stocks? with limited supply and prolonged low rates, reits continue to look good. more from him and others online realty check dot cnbc dot com. >>> bring in the senior vice pr

diana olick knows. >> home ownership just keeps falling and younger americans are clearly behind the drop. take a look. the rate now is at 64 -- a 19-year, it reached a high of over 69% back in 2004, but add to that the fact that nearly 1 million homes still have delinquent mortgages or already in the foreclosure process. the real home ownership rate is even lower. we know first-time home buyers are less than a third of today's home buying market. the median age of a first-time buyer was 31 over a decade ago, but a new survey by zizillow finds that age could jump for 34 or even older over the next decade. that may seem like a small jump, but experts say that will keep home ownership overall lower, could even impact sales of home goods. just think about it. the time horizon for owns, decoratesing, renovating a home will be shorter. now, why are not millennials buys? employment among 25 to 34-year-olds, dhs considered the prime age group for housing demands, they failed a from 75.8% in june and 76% at the beginning of the year, according to the bureau of labor and statistics. it has be

diana olick is live from d.c. with the story. hey, diana. >> reporter: it was a disappointing number, but these census figures are squishy because there's such a wide margin of error on this. take a look. the street was looking for 425,000 annualized sales from june's really bad 406k. but instead it got 412,000, but june was revised way up to 422,000. so it ends up being a 2% drop month to month, but we're up over 1% in july from a year ago. i hope you can follow all that. now, there are some very big regional differences. mainly that only the south saw a gain month to month. the northeast saw a huge drop in new home sales from june to july. the west also a big drop. every region but the south is also down in sales from a year ago. now, the median price of a newly built home is factoring into this. it's up 3% year over year to 269,800, just to give you an idea of the premium on new, that's 21% higher than the existing home price in july. so the new home builders have admitted they're focusing on the higher-end products because tha

diana olick has more live from washington. >> reporter: well, simon sales were down month to month, but there's a huge margin of error. you have to look at june to really understand july. so let's do that. the striae was looking for 425,000 annualized sale in july from the june's really low 406,000. instead it got 412, but june was revised way up. so it ends up being a 2%, but up over 12% from a year ago. now there are big regional differences mainly only the south saw a gain month to month. the northeast saw a huge drop in new home sales. the west also a big drop. every region but the south is down in sales from a year ago. the slower sales pace pushed supplies to six months. that's a lot less tight. the builders are starting to develop more loss, though starts are still very slow. that, of course, keeps prices high. the median price rose 3% from a year ago, and to give you an that's 21% higher. 9 home builders have admitted they're focusing on the higher end product, because that's where demand is, but d.r. horton saying they will offer incentives to get more buyers in the door. >> di

let's bring in diana olick. what in a bigger report stuck out the most to you. >> reporter: you're looking at it, brian. not me, them. they're building a multifamily rental apartment. yes, single families took a nice jump up from a year ago, but multifamily is up 50% from a year ago. i remember talking to analysts a year, two years ago even saying they were concerned about overbuilding in multifamily, there wasn't going to be enough demand. that's why you saw fast forward to today. have i low vacancies, even though rents are up. there you go. avalon bay, equity residential apartment reits seeing an all-time high today. >> obviously one month does not make a trend, so what do all those people who you speak to think about going forward, the future months for for using starts? >> we know these are very volatility numbers. so you look at three-month running averages. we've seen apartments waver a bit, but very strong this year. looking toward the fall, we do expect to see the single family bump up a bit, but the bui

diana olick, what's going on? >> scott it was a disappointing number, but these census numbers are really volatile. a very wide margin of error on this. so, you have to look at june to understand what happened in july, so let's do that. the street was looking for annualized sales from june's 406,000 and got 412,000, but june was revised way up to 422,000. so, it's a 2% drop month to month, but up over 12% in july from a year ago. i hope you followed all that. one note on that, on the year-over-year comparison, last july we saw a huge drop in new home sales because it was right after mortgage rates jumped. so, doing better than last july was kind of pretty easy. now, there are some big regional differences, mainly that only the south saw a gain month to month. the northeast saw a huge drop in new home sales from june to july, the west also a big drop. every region but the south is also down in sales from a year ago. now, all of this on median home price of a newly built home, which rose 3% from a year ago to $269,8

diana olick will tell you how much longer this real estate rally will last. >>> an issue touched offy bank of america's record $17 billion settlement with the government. were banks subjected to extortie extortion during the financial crisis? that's the term a former bank ceo is using. larry kudlow weighs in this just a moment. e financial noise financial noise financial noise financial noise in a we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. female narrator: it's posturepedic versus beautyrest it's posturepedic versus beautyrest with up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing. mattress price wars are on now at sleep train. ♪ your ticket to a better night's sleep ♪ there is the pi

let's bring in diana olick. is that a big concern for housing or is it quite volatile?definitely volatile especially now. we're seeing it bump up for the first time but just two percentage points. it's been down in the double-digit percentage points year over year and for the past four years foreclosure activity has been falling. of late, very dramatically. i think what we're seeing here is a market normalization. so you're going to see these month-to-month fluctuations. remember all those government loan modifications done during the worst of the foreclosure crisis? they had a five-year turn. and believe it or not, we are there. next year, a lot of those modifications start turning into pumpkins. so we could see the numbers tick up. >> good point. i also want to ask you while i've got you about homeowner's insurance. how it might potentially be one thing holding back housing from recovering even more. >> absolutely. if your home sits by the ocean or atop a fire-prone canyon or even in a not-so-nice neighborhood, you probably know you're paying more for homeowner's insu

. >> diana olick has news on nahb, housing information for us. diana? >> that's right, scott.sociation of home builders sentiment index jumped two points in august to 55. the expectation was for it to rema remain flat at 53, a jump to the upside. third monthly gain since january of this year. index measures sentiment at a 50-point level. anything above 50 is considered positive and it jumped over into positive last month. so again, up at 55 is a surprise to the yuch sione side. current sales and sales expectations were both up two points to 58 and 65, respectively. buyer traffic still on the weak side, did gain three points but at 42 which is negative territory. now, regionally, midwest took a nice leap in home builder confidence, up seven points to 55 into the positive. west up four points to 56. northeast up two points. weakest in confidence 38. south one point jump up to 52. good surprise to the upside on home builder confidence. but also a report from fannie mae saying their outlook for home build in second half of the year and housing in general has, quote, deteriorated,

. >> diana olick saying fannie maid said there are not enough workers or land to meet the demand.on the immigration topic. guy adami, thank you. much more coming up with guy adami on "fast money" at 5:00 p.m. they'll be asking dennis gartman which beaten-down sector he's buying today. don't miss it. stocks kicking off the week here with a bang. the market has now gained back most of what it lost in that pullback that began late july. so, should you forget fears of a correction and go full steam ahead for stocks? that's next. >>> also, she's one of the banking industry's biggest critics, and now she's got the ear of president obama and fed vice chair stanley fischer. coming up, stanford professor anat amadi tells us how they should be fixing risks in the financial sector. also, sprint expected to announce new prices. is this a marketing campaign or should verizon and at&t be worried? we will also hear from president obama in a few minutes. keep it here. you're watching cnbc, first in business worldwide. being a keen observer of the world has gotten you far, but what if you could se

diana olick, round it up for us. >> well, kelly, leonard, d.r.ovnanian, all turned to the up side after better-than-expected earnings from home depot and that nearly 16% jump in hotel housing starts, but the real play is when you break down the numbers. single family housing starts were up 8.3% in july from june and up 10% from a year ago. multifamily, which is mostly apartment rentals, up 33% month to month and up nearly 50% from a year ago, and that's why you're seeing apartment reits like avolon bay and equity residential hitting new all-time highs today, and they're significantly out-performing the s&p. now, construction is booming in most of the markets where the activity is largely in multifamily. there's a new report from trulia showing that new york, boston, houston, northern california, these units are directed at younger millennials and at those downsizing baby boomers. now, overall, of course, both single-family and multifamily starts were good. they were solid. but single-family is still running well below your historical norms and bu

our diane olick is here to explain how and why. diana?low interest rates with very solid fundamentals and it's easy to see why commercial real estate has been a great play. real estate investment trusts have seen very strong returns year to date. take a look. u.s. equity reits return 15g% year to date with a dividend of about 3.5%. compare that to the s&p 500, which is up around 4% with a dividend yield of 2%. apartments are still the top pick despite concern last year of potential overbuilding. freddie mac is reporting that supply of new units are being absorbed and fundamentals should be strong for at least the next two years. they point to nearly 4 million potential households that were not formed due to the great recession. now, those accounted for close to 75% of those were young adults and over the next decade close to half a million rental apartments may be needed each year to meet that new demand. office is still a bit mixed but analysts are even bullish on regional malls which had been underperforming but which are now improving.