but as diana olick reports, realtors are starting to get worried. >> reporter: september sales roundedtrong spring and summer season for the housing market. the numbers are well above a year ago and price gains are still strong. the trouble is the bulk of the action is on the high end. the median home price hit $221,900 in september, but sales were strongest for homes priced above that median. above 250k sales gained 22% from last year. but sales of homes priced below 100k, they fell. that's because there's so little supply on the low end. >> because land prices have remained elevated in this recovery, builders are having a harder time building a lower-cost home. it's harder for them to do that because they can't reach the profitability levels that they need to realize in their numbers. >> reporter: overall the number of listings actually fell in september. it usually rises in the fall due to slower sales. the lack of cheaper homes is at least partially to blame for the drop in first-time buyers. they're nowhere near normal levels and even fell from a month ago. typically, this is the

diana olick explains why. >> reporter: this nearly new colonial will cost you more than twice as much as this nearly new colonial. why? because the first one is in bethesda, maryland, a close-in suburb of washington, d.c. the second home is in ashburn, virginia, an hour's commute from downtown d.c. >> we're still a little bit under prerecession pricing, where the inner jurisdictions are now above their previous pricing. >> reporter: the suburbs usually recover from a housing downturn more slowly than their urban neighbors, but the divide this time around is greater than ever according to a study by john burns real estate consulting. take chicago. home prices in closer-in deerfield are about 15% below their recent peak, but keep going out the interstate and you see prices are still as much as 30% below peak, the same in l.a., where glendale is already 2% above peak, but farther out, palmdale is 37% below. and in d.c., the close-in suburb of arlington, virginia, is almost 8% above the peak of the housing boom, but head out to ashburn, and you see prices are nowhere close to recovering t

for "nightly business report," i'm diana olick outside atlanta. >> and that's "nightly business reportt. i'm sue herera. thanks for joining us. >> and thanks from me as well. i'm tyler mathisen. have a great evening, everybody, and we'll hope to see you right back here tomorrow night. narrator: these days, it can feel like we spend much of our lives stuck behind the wheel of a car. so what if your car could take the wheel? lipinski: just press those two buttons and let go of the steering wheel. narrator: from audi to google, major companies are racing to develop cars smart enough to handle the driving. kalra: self-driving cars have the potential to revolutionize the way we work, the way we socialize. narrator: but how reliable is technology that blurs the lines between car and driver? shladover: if the computer that's driving the vehicle fails, somebody could, indeed, die. narrator: coming up, how self-driving cars will spark new opportunities and challenges on and off the road. [ heart beating ]

for "nightly business report" i'm diana olick in washington. >> for more on the remodeling wave you candiana's story on our website, nbr.com. >>> and here's another look at the day on wall street for you. the dow jones industrial average gained 74 points to close at 17,215. the nasdaq rose 16. the s&p 500 added 9. for the week all three major averages rose. the nasdaq seeing the biggest gain, of more than 1%. and that does it for "nightly business report" for tonight and for the week. >> and have a great weekend, everybody. i'm tyler mathisen. thanks from me as well. we'll see you monday. captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org gwen: what it takes to run for president and what it takes to be president. tonight on "washington week." . hillary clinton i'm a progressive that would like to get things done. i wouldn't ask anyone to vote for me based on my last name. gwen: hillary clinton with a little help from her friends. >> the american people are sick and tired about hearing of your damn emails

for "nightly business report" i'm diana olick in washington. >> for more on the remodeling wave you candiana's story on our website, nbr.com. >>> and here's another look at the day on wall street for you. the dow jones industrial average gained 74 points to close at 17,215. the nasdaq rose 16. the s&p 500 added 9. for the week all three major averages rose. the nasdaq seeing the biggest gain, of more than 1%. and that does it for "nightly business report" for tonight and for the week. >> and have a great weekend, everybody. i'm tyler mathisen. thanks from me as well. we'll see you monday. arrived at the major crime unit this morning, ready for action. this is my world. feels like the calm before the storm. but i know that i'll be kicking down doors before long. ( beeps ) oh, no! come on, brian! come on, think, think, think! on my way in this morning, i played a game that keeps me sharp-- spot the criminal. it's a game i always win. cop is in my dna. ( beeps ) morning. crying out bloody loud!

for "nightly business report," i'm diana olick outside atlanta. >> and that's "nightly business reportt. i'm sue herera. thanks for joining us. >> and thanks from me as well. i'm tyler mathisen. have a great evening, everybody, and we'll hope to see you right back here tomorrow night. male announcer: the following program contains mature content which may not be suitable for all audiences. viewer discretion is advised. jimmy. what on earth are you doing here? i'm in a bit of a tight spot, jenny. fred: don't worry, nurse lee. i shan't be telling any tales. i had a few overnight guests of me own. you look well. and you. very well. as do you. ahem! it's not right, mr. collett. they can't make you leave your own home. don't cry over an old codger like myself. [crying] i'm scared. we're going to take good care of you. don't worry. you don't understand. what are you so afraid of, mrs. lawson? joe? male announcer: funding for "call the midwife" e" is provided by contributions to your pbs stations from viewers like you. thank you.

carlo, on with diana olick.er: i was wondering if you could tell me -- to real estate agents have to pay dues? and if they do pay dues, do they have any say so as to where this user spent -- where those dues are spent? tost: they have to pay dues the national association of real estate agents, and their different terms. what specifically -- why the question? caller: quite often you hear duesunion people pay their and had nothing to say about where the dues are spent. guest: ok. not really housing question. i don't know exactly. i can't answer that. host: we have been talking commercial real estate, houses standing so far? -- how is it standing so far? guest: there's a lot of different commercial real estate. the apartment sector is going very well. the industrial sector, which i call the least sexy sector, where houses are doing very well. because people aren't shopping in the malls, they shopping from amazon and online. you put in a warehouse, close to the city. offices are coming back, but it is different. we

diana olick now on how home sales could react. >> reporter: home buying slowed down in september foristing homes and new construction. now mortgage rates are edging higher and could jump even more if the federal reserve raises rates in december. while it seems like higher rates would only hurt, the ceo of one of the nation's largest builders, pulte homes, argues they could actually help. >> i predict that if they raise them in small increments it actually could be a catalyst for the market for people to get off the fence and jump into housing while rates are still relatively good. >> reporter: if interest rates on the 30-year fixed mortgage went from 4% to 4 1/2% next year, that would raise monthly costs by about $29 for every $100,000 financed. it's not a ton, but just the fear of paying more later when you could pay less now could make potential buyers more eager to get the deal done now. it could also just make them feel better about buying. >> if you have interest rates that go up, that generally means that the economic conditions are improving, borrowers feel more confident abou

diana olick joins us with more. ana. >> attitudes are starting to trump conventional wisdoms on location. especially among the nation's youngest and oldest home buyers. this nearly new colonial will cost you twice as much as this nearly new colonial. why? because the first one is in bethesda, 34d m.d., a suburb of washington, d.c. the second home is in ash burn, virginia, an hour's commute from downtown d.c. >> we're under prerecession pricing where the inner jurisdictions are above. >> reporter: suburbs usually recover from a housing downturn more slowly than their urban neighbors but the divide is greater than ever this time around according to a new study by john burns real estate consulting. take chicago, home prices in closer in deerfield are about 15% below their recent peak, but keep going out the interstate and you see prices are still as much as 30% below peake, the same in l.a. where glendale is the 2-% above peak but farther out palmdale is 37% below. and in d.c., the close-in suburb of arlington, virginia

diana olick. defense stocks are the ultimate safe haven. >> we're shifting from motorcycles to missiles. the industrial sector has been hammered this year with one notable exception. defense stocks have been defensive plays as investors rotated out of more cyclical industrial name. we've seen international sales and steadfast buy back activity. take a look at lockheed martin. it's down today despite an earnings feed and full year hike. the stock is up 7% so far this year. it is handedly beating the s&p 500. northrop grumman has done better. and raytheon gained as well. only about 4% so far this year. so in the short term, there are some headwinds. the biggest perhaps coming from washington. the fiscal 2016 defense budget is up in the air. many analysts do remain long term bullish on this group. companies announce cost cutting efforts, continue to buy back shares and stand to benefit from increased geopolitical risks. tyler? >> thank you very much. >> ferrari is gearing up for the red hot ipo. just

let's bring in diana olick with more on pulte's problems.bout how good house something doing. what happened to pulte? >> pulte missed by 10 cents, but the new orders were still pretty good, and the miss really was more about trouble getting homes finished and closed. so q3 eps came in at 33 cents a share, closing volumes down 6% from a year ago was a lot of it. also higher sg & a expenses. orders were in line with expectations, up 8% from a year ago, and that's the best order print in almost three years. the average order price way up. 8% beating estimates. so you ask what happened? labor and weather. it's taking builders longer to convert their backlogs into closings. there's just not enough labor to go around to get the homes built. also, a lot of heavy rain in the south during the spring delayed some construction. as for prices, land is expensive. so builders are having trouble putting up that affordable product. pulte is, therefore, going after the more affluent first-time buyer. this is interesting. that's the buyer who has been renting

diana olick reporting. >> let's get to dom chu for a market flash. >> airlines before, the transports rising 1%, continuing to hold above that 50-day average price, the sector up 5% for the week tracking for the best week since october of last year. back then transports gained 5%, still very big move for transportation stocks. >> it's interesting it's on a day when oil is actually -- well, it's been up this week, so the transports moving up as well. well, folks, that will bring us to the close of "power lunch." thanks for watching. melissa, always good to be with us. >> that was fun, tile letter. don't go anywhere because our friends over at the "closing bell" are ready to take over right now. >>> welcome to the "closing bell," i'm michelle caruso-cabrera in for kelly evans at the new york stock exchange today. >> and i'm bill griffeth. oil big story this week. our friends at "power lunch" were talking about the commodity is up 9% this week alone. we're wondering if this is a sign of a bottom in crude, maybe even in commodities at some point. >> maybe it's finally turned. some say cas

diana olick and kevin owe leery will discuss that. >>> dow is positive by about 17 points although it's been propped up to a large degree by dupont and some of the oil names as oil does very well. meantime, fast food giant yum! brands expected to post quarterly results after the bell tonight. analysts expect the owner of fast food chains kfc and taco bell to report earnings of 1.07 a share, revenue of $3.68 billion. >> before fried chicken and pizza we have to talk about egg mcmuffins. it's the day you will finally be able to get your egg mcmuffin at any time of the day. shares of mcdonald's are higher today, up by .75% and hitting a 52 week high. >> will it live up to the hype? nick says it smells like desperation but dan fitzpatrick thinks it's a good move. >> nick, we know the day part has worked for them, we know the margins are fatter in that time of the day. why don't you like this? >> you know, when it worked for them they were trailblazer the day part. everyone else followed suit. it was really led by coffee and the coffee at cash rates are what makes that day part profitable. a

diana olick shares some of the builders' optimism right now. >> it was no question, a solid jump in october to the highest level in a decade, but there's something weird in the numbers and i will get to to that in just a second. a 3 point gain in october to 64 on the national association of home builders monthly sentiment index, that's up from a downwardly revised september reading, 50 is the line between positive and negative. a year ago sentiment was at 54. here is what continues to baffle me, though. isn'tment is back to where it was in october of 2005, but single family construction in 2005 was at 1.7 million and the latest analyzed reading for this year is around 700,000, less than half. so i guess for the builders the optimism is all in the future. future sales expectations were the strongest component of the index jumping 7 points 2075, current sales conditions rose 3 points to 70, confidence in buyer traffic was flat at 47 that one still in negative territory. builders are citing lack of labor and lots as head winds but en investors say easing credit conditions could really help goi

but, for that, let's head east and go to diana olick. diana?reporter: rick, existing home sales up 4.7% to a seasonally adjusted annual rate of 5.55 million units. that is a solid beat. the street was looking for 5.4 million. up to 5.5 million. that's up 8.8% from a year ago. the only trouble is inventory at 2.2 million homes for sale. down over 2% for the month and down 3% from a year ago. this is awe head into the slower season for home sales. i know that i said sales increase month to month seasonal alley adjusted. you take out those seasonally adjusted sales, they fell 6% from august to september. we should be seeing that inventory rising. we are not. realtors warning, this could be a big problem when we get into the spring season of 2013. the median existing home sale price in september, 221.900. the higher end homes are selling. sales on the low end actually down. that is because there is so little inventory on the low end. first-time home buyers still not in this market. just 29%. they should be 40%. back to you guys. >> with the dow up

diana olick is tracking them. >> it's the link. the short answer is, they're pushing them down decidedly. as mortgage rates loosely follow the ten-year yield. we started out at the high for september of 3.292%. now we're coming down. you don't see it in the charts yet. this from mortgage news daily. some lenders at 3.625%. this will have a much bigger effect on refinances. we have been low on rates for years. there are still some unable to refi before. on the buy side, we certainly saw a jump in rates in the summer of 2013 hurt home sales. it doesn't work that way in the opposite. we have tight supply in housing. the jobs number is a negative for housing than the lower rates are a positive. >> thank you, di. seema mody with a market flash. >> sick mother's takeover talks have stalled with chico's. that's akouding to reuters. this is the second attempt this year of sycamor toerks te to tr acquire chico's. >>> what is that? it's a picture in astronaut scott kelly. it's hurricane joaquin. there's another big storm causing flash floodi

diana olick explains. >> inflation up 4.7% in july from a year ago according to case-shiller.that's actually a bigger gain than we saw. so how do they get cash strapped young millennials back into buying? well, for one thing, they don't go big. they got tiny. very tiny. the area, very pricey. the condo, not so much. $275,000 for this studio unit. the developer behind it, the peterson group, has to pay very close attention to detail because they have to use every teeny tiny square inch. so, of course, you have your murphy bed in the wall. that's a given. but also underneath the sofa, you have all your storage for your bedding. but if you're saying to yourself i have my dining room in the middle of the bedroom/living room, all you do is pick the table up, latch it in. voila. you have artwork. it's there. i promise. come into the kitchen which i have to say by new york standards is quite spacious. you have high end german appliances but you'll notice they're slightly smaller than your usual appliances. you also have a very large size bathroom in the back. no tub. i can't get you

diana olick has that story. >> we may be in a suburban warehouse, but according to poulte, we are in hub, the kitchen. according to them, your kitchen speaks to who you are that is your personality. so, this is the first time the home builder has done this, kitchen throwdown, that is inviting suppliers like whirlpool, moen, electrolux and kohler to design kitchens and run focus groups through them. are you a young, married millennial? a downsizing baby boomer? a parent? do you entertain or not the life of the party? you are a foodie or do you cook to survive? it is marketing to the buyer's personality, a strategy particularly ur jept ngent now the builder's numbers are disappointing. here's what the ceo of pulte thinks is driving demand. >> you don't have a lot of urgency. buyers are saying if i don't buy today, maybe in a couple months from now it will be just as good a time. >> he actually believes that slightly higher interest rates might get some potential buyers off the fence. what they want to do now is create that urgency, create that excitement and do that in the kitchen. sim

diana olick is in washington with the latest read. hi, diana. >> hi, mandy. builder confidence in the single-family home market jumped to the highest level in a decade despite the fact that home construction is it well below where it was a decade ago. take a look, if you will. sentiment jumped three points in october to 64 on the national association of home builders monthly sentiment index. that's up from a downwardly revised september read. now, 50 is the line between positive and negative sentiment. and a year ago sentiment was at 54. here is what's a little odd though. look at this. sentiment is back to where it was in october of 2005, but sing single-family construction in 2005 was at 1.7 million. the latest annualized reading for this year is just over 700,000, in other words less than half of that. as for the index components, sales expectations are strong jumping seven points to 75. current sales conditions rose 3 points to 70. kf gheconfidence in buyer traff flat, still in negative territory. builders are citing lack of labor and lots but analysts sa

diana olick has to tell us it's not dolphins but flippers. flippers are back. diana. >> haha, brian. pending home sales were weaker than expected in september and it was widespread. these are signed contracts, not closings, so it is a future indicator of sales in october/november. overall sales down 2.3% from august but down a steeper 4% in the northeast, the best read was in the best, realtors blame ago lafk inventory and rocky financial markets, higher home prices also a likely culprit. we saw a steeper drop in sales of newly built homes. the one area we are seeing new sales action, though, home flipping, that is buying and selling a home in the same calendar year. flipping had been falling off with home price gains shrinking but the share of home flips jumped 18% in q3 from a year ago that according to realty track. more demand from entry level buyers looking for starter homes. the average returns on investment for a flip is 34% overall with gross profit at about $62,000. now, more than a third of all flips are being done on homes priced at the very low end o

. >> let's get straight to diana olick in washington. >> breaking news on pending home sales. >> pendinge sales down 2.3% from a downwardly revised august reading. that's amiss. the street was looking for a slight gain. pending home sales still up 3% year over year in september. these are based on signed contracts. it is a forward-looking indicator of sales over the next two months. this is the second straight month of declines. we are now seeing the second lowest level of pending home sales for the year. the realtors blaming a dearth of available listings in lower-end properties for first time home buyers. they are also blaming rockyness in financial markets. this comes after a steep drop in pending sales of newly built homes in september as well. we seem to see a slowdown across the board. sales down everywhere but worst in the northeast. down 4%. down 2.5% in the midwest. down 2.6% in the south and just slightly down 0.3% in the west. back to you guys. >> with the new home sales report, wasn't housing one of the bright spots in this recovery at this point? >> it had been a bright spot

>> diana olick, thank you so much. amazing numbers., ism data, construction spending. plus, the chief commits and strategist, david rosen burg when we are back in a moment. >>> good thursday morning. welcome back to squawk in the street. i'm carl quintanilla with simon hobbs and david faber. sarah eisen is in washington. rick santelli has breaking isn data for us. rick? >> wow. this is big-time. september, ism, falls to 50.2 from an unrevised 51.1. now, that might not seem like a big move but it is. 50.5 to 50.7 was expected. the last time we had a number in this area of 50.2, you have to go all the way back to may of 2013 when it was 50.1. so far, the low read for this year prior to this number was actually last month at 51.1. let's move backwards through time for august construction spending. this one is interesting. it came out .7, which is what it was last month. last month moves to .4, which was expected this month. you confused yesterday? sequentially, with he move from .4 to .7. in the reality of things, it isn't a big rise. do

in the meantime, let's get to diana olick in washington breaking news on home builder sentiment. >> homeer sentiment in october up 3 points to 64 on the national association of home builder monthly sentiment index. we haven't seen that level in about a decade. sales expectations rose 7 points to 75. current sales conditions up 3 points to 70. and buyer traffic was flat at 47, still the only index component mired in the negative territory. builders do cite softness in some markets due to availability of lots and labor, but we did see a surge of confidence out west. the rest of the country saw a one point gain. this as analysts or some analysts at lesion are quite bullish on the home builders stocks. compass point has raised its ratings on two builders. they cite that they are looking at the hope trade, that is during november to march when investors buy into the home builder stocks at the lows hoping that the spring season will turn out to be gang busters. 10 they do expe so they expect to see stocks rise and they are again hoping that they will see the stocks surge ahead of a possibly be

diana olick is joining us now. diana, why have the reits been rocking?ll, it's plain and simple, an interest rate play. reits are extremely attractive in a low-yield environment when investors are searching for yield because it's a high dividend paying stock. for the past several years they've been doing quite really, outperforming the markets. at the beginning of the year they started to underperform because everybody that you the fed was going to raise rates. come the end of the summer, it became clear come september they were not going to raise rates and then we get the horrible jobs report, they may punt to next year. suddenly investors are coming back into the reits again for that high-yield play. let's not down play the fundamentals on reits either. we have seen really good activity in the apartment market even though some folks thought it was overheating. we still have record high occupancy, record high rates, and continued demand. the office sector is coming back slowly with jobs and the warehouse and industrial sector doing very well. still reta

diana olick is live in washington with the latest. diana?> mandy, it is a roller coaster ride that just keeps on rolling. mortgage applications shot up again last week after plummeting the week before. total apps up almost 12% for the week. break it down, refis up 9%. loan applications to buy a home up 16%. so what's with all the swings? well, on october 3rd new regulations went into effect that require lenders to provide borrowers with new disclosures three days before the loan closes. there was all kinds of anxiety that this would delay or scuttle some loans. so people rushed in before the deadline, then applications fell off after the deadline, and now they are coming back up again. so where are all -- when we remove all that noise where are we? about back to where we were in august and september. refinances are down nearly 9% from a year ago and purchase applications are up about the same. interesting though in this report we did see a jump in government loan applications. fha and virgina which are low o down payment loans. this could be

diana olick with what's going on. >> reporter: all of this is due to the start of new regulations for lenders that went into effect october 3rd and had everyone worried so the big jump to get in before the deadline and then the big drop afterwards, but there is something more here. break out applications to buy a home, they had surged 27% before the rules but fell 34% after and are now below last year's levels for the first time since last february which was a very slow month for sales. quick note though, the ten-year yield which rates followed and mortgage rates headed higher. >> the big stock stories of the year, walmart. is it a good opportunity to buy the stock or should you stay away? fellow dow member nike meeting with analysts today. its stork up 30% this year and nike's ceo will join us live. you are watching cnbc, first in business worldwide. bob dylan. to improve my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that so

let's get to diana olick with more. >> developer william zachen dorff says demand is better than evers, quote, confident he will get his $130 million asking price on that penthouse up there. 520 park avenue is his latest collaboration with architect robert a.m. stern. they teamed on the 15 central park west. 520 is on east 60th street but they paid in the neighborhood of $40 million for the park avenue address and all the air rights. units still wastart at $30 milln depending on the floor around the view. that's for a full floor. 5100 square feet apartments with 360 degree views. there will be five duplex penthouses at 9100 square feet and then all the way up at the top again that 12,400 square foot penthouse with 1700 added square feet of outdoor space. he says he expected a middle eastern buyer for that potentially. i asked though if the latest swoon in chinese markets concerns him. >> everything concerns me but very funny, we think we've seen more chinese buyers in the last 60 days than even before. i think, frankly, what's unsettled china a bit has made the u.s. that much more app

diana olick joining us more on who may benefit. >> brian, that's why this home depot number is no surprisere feeling better about their property value they neem sooem to want to add. growth on annual spending on home remodeling is expected to surge from 2.4% to 6.8% and that's according to harvard's joint center for housing studies. growth in both home sales and home values. when you buy a home you generally want to fix it up a bit and put your stamp on t but also when you feel like your home's value is growing you don't mind spending more on it to get exactly what you want. cash out refinances jumped 68% this past summer from a year ago according to black knight financial services. interest rates are still low, but with expected to rise next year. people want to get the cash now while it's cheap. a lot of that cash is going right back into the home in the form of renovations. it's also going into companies like home depot, mass co, whirlpool which have seen big earnings growth already. remodels in this dc neighborhood they are booked throughout winter, some next spring. one of the big iss

diana olick, why are we talking about zombies? foreclosure is the owner has left but the bank has not repossessed the house. higher home prices and new streamline foreclosure systems have combined to wipe away much of the zombie population, down 43% from a year ago, that's according to realty track. over 20,000 homes and that's only about 1% of the vacant home population. honestly that's what's most interesting about this new report. there are 1.5 million vacant homes in the u.s. and well over half of them are not in any kind of financial distress. they are either owned outright or the owner is up to date on the mortgage. why so many? clearly some are in such poor condition they are not worth anything to the owner. you see a lot of that in the midwest, but given the supply of homes for sale is so low today the overall vacancy rate still remarkably near recession highs. >> "closing bell" starts right now. >>> and welcome to the closing bell, i'm michelle caruso-cabrera in today for kelly evans here at the new york stock exchange. >

dianna olick joins us with more. hi, diana. >> hey, becky. location is is right but attitudes trump conventional wisdom on location, especially oldest home buyers. this nearly new colonial will cost you twice as much. one is in bethesda maryland, a suburb of washington, dc. the second is in ashburn, virginia. an hour's commute from downtown dc. >> we're still a little bit under prerecession pricing, and others are prerecession pricing. >> usually a housing downturn is recovered slowly more than the urban neighbors but the divide is greater than ever from john burns real estate consulting. take chicago, home prices closer in deerfield are about 15% below their recent peak, but keep going out the interstate and you see prices are still as much as 30% below peak, the same in l.a. glendale is already 2% above is 37% below and in dc, 8% and in ashburn, nowhere to close recovering their peak values. >> the house you can get for the dollar drops dramatically outside of the city. >> reporter: 40-year-old ian walsh and young family moved out to ashbur