diana olick has the details of a new port. > reporter: as the mercury soars, so do already overheated home prices. the latest read shows values in may jumped over 7% compared to a ye ago, the biggest annual jumpn ur years according to core logic. >> i don't see us really slowing appreciably over the course of the next y lr. tle moderation in national home price but not much. we're forecasting a 5% rise in national home prices over the next 12 months. so a little moderation but not much at all. that'such better overall. >> reporter: the supply of homes for sale has been shrinking for three straight years, and it's not all the home builders' fault. they are increasing production, although slowly. part of the shortage is being caused by current about a quarter of potential buyers w already own said they will not movif thenterest rate they get on their next mortgage is one percentage point higher thanhat they have now >> half of all homeowners with a mortgage today have a rate of 3% and 3.25% or lower. so when they're looking at 4.6% rate, they say, maybe i'll stay put in my home a bit lo

diana olick found out there could be tariff tradeoffs. this week's cover story. >> in the woods of central maine, pleasant river lumber is moving a lot of logs cutting lumber day and night as the company's co-president lays the groundwork for big expansion. >> we're confident our industry and the economy and in the housing market >> and in the value of his xhod. framing lumber shot up 50% in the first half of this year to a record high, as a perfect storm swirled around canadian supply forest fires, a transportation shortage and new duties imposed by the u.s. on canadian lumber >> in 2017 we were expecting the tariffs to increase, home prices by about $1300, $1400. it's gone way beyond that. the impact is now $7500. >> a blow to home builders and buyers but a boom to u.s. lumber producers. >> that's given us a level of confidence we didn't have about ever that we have a level playing field. >> he says he's putting $20 million into his business, planning to expand production by 50% in the next two years, and adding about 40 more workers to

diana olick explains. ♪ ♪ >>> stephen paul of mid atlantic builders is still putting up homes in suburban but he admits the market isn't what it was just a few months ago. >> the temperatu's lowering a little bit. it was peaking in march. sales were very strong i march. we set a lot of records and it's steadily been dropping. >> sales of newly built homes dropped 5% in june compared with applications to buy a newly built home were considerably lower than june of last year, but this is not about demand. it's all about high costs. first, rising interest rates. theverage on the popular 30-year fixed shot up to start the year and then kept moving higher. that and builders are having to raise home prices to account for higher labor and material costs. duties duties o canadian lumber vastly increased its cost and recent tariffs on steel and aluminum are only adding to that. >> builders have to be very careful, and it's a fragile situationngith rai prices just to recapture costs, but right now we're in a position where we have to raise prices to break even on those price changes. >> i am very ne

by disrupting what may be the biggest part of selling your home diana olick has more on this story. >ter: it is what most people see first when they're looking to move to a certain neighborhood or within their own neighborhood, it's the for sale sign compass real estate brokerage, a new kid on the block, is disrupting the sign. this fall you may see this round interactive sign and, yes, it spins, it lights up, it does that with motion sensors when you come within a 20-foot radius if you have the app on your phone, it will send you a not y notification about the property and connect you with the agent the designer of this sign said he researched this for about a year and this final product is just what the agents said they wanted >> we wanted to consider creating the ecosystem that makes compass so powerful, which is the combination of data and software and hardware that can help really deliver something of value for our agents and clients. >> the technology in the sign can manage open houses, digital lock boxes and even connects with waze for directions it will cost agents about $500

for nightly business report, diana olick in capital heights, maryland. >> before we go, a fal look at the day on wall street. kind of a flat day, there are a lot of earnings coming this week. jerome powell will be testifying before congress this as well. the dow rose 44 points today, the nasdaq was down 20. the s&p down 2. that is nightly business report for tonight. i'm bill griffith, thanks for watching, everybody, have a great evening, hope to see you again tomorrow night. >> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, kovler foundation, pursuing solutions for america'sgl ted needs, and purepoint financial.ha >> how do we our tomorrow? it starts with a vision. we see its ideal form in our mind, and then we begin to chisel. hawe strip away everythingt stands in the way to reveal new ssibilities. at purepoint financial, we have designed our modern approach to

more and more diana olick tells us what it is. >> liz is already feeling right at home in p her newlace in suburban maryland. she and her husband didn't want to leave the city, but finding a larger house in t d.c. forir growing family was just too wpensive. even this home a challenge. >> we bid on four housesnd two of them went kind of crazy. into crazy bidding wars. >> in order to afford the bigger home, they needed to rent out the home they already owned in an increasingly trendy neighborhood on capitol hill. >> i made aprdsheet and ran all the different options. we stay in d.c., we rent out, it made the most financial sense for us to keep our house in d.c., rent it out and buyhere. >> home prices hit yet another record high in june, according to the national association of realto, and the supply of homes for sale continues to lows.near record part of that is because investors scooped up homes, turning aboon 5 milli of them into new single family rentals. demand for homes t own and rent is stillg very stron as the largest generation marriage and family. >> of course, not everyone can

but they're not taking advantage of it, diana olick explains why. >> home values today are skyrocketing, whicheans homeowners have a growing amount of cash at their disposal. so called tapable equity is the amount yfr home is worth, above the 20% cushion most lenders require. it grew by 7% in the first arter of this ar, compared to the previous quarter, compared to black knight, thati he largest single quarter growth since they began tracking it in 2005. homeowners have a collective $5 trillion in tapable equity. the highest volume ever recorded. il it down to the average homeowner with the mortgage who has gained $14,0 in tapable equity in the past year, and has $113,900 aavailable to drew. fewer are doing that. >> ihink the typical american doesn't have that level of awareness, they're not the numbers. >> home equity lines of cr sit which iond loans to pull out cash, were flat at the start of this year, for those that are using them, the amounth of cas they're taking out ist a two-year low. moreeople are doing cash out refinances on their first mortgage, which doesn't make a ton of se

for "nightly business report," i' diana olick in washington. s> to read more about that real estaten makeover, head to our website, nbr.com. >>> beforegoe one last look at the day on wall street, capping off a very w busyk of earnings, dow fell 76, nasdaq biggest hit today, down 11 4 with technology stocks sharply. nasdaq was down 1%, s&p up. >> we did it. we got thrgh the ek. that's "nightly business report," i'm sue herera. thanks for joining us. >> i'm bill griffeth w have aderful weekend. we'll see you again on monday. >> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, kovler foundation, pursuing solutions for america's neglected needs, and purepoint financial. >> how do we shape our tomorrow? it starts with a visio we see its ideal form in our mind, and then we begin chisel. we strip away everything that stands in the way to reveal new possibilities.

for "nightly business report," i'm diana olick in >>washington as we mentioned earlier, stocks rose today by techhelogy and's one group within tech that's getting a lot of attention and that would be the semiconductors and bob pisani explains why the sector along with two others are in focus on wall right now. >>> the stocks staged an impressive comack today though on very light trading volume which is what you might expect on a holiday-shortened week, but looking back over the last couple of week, thelarkets overake on a notably defensive tone amid the rising trade tensions and the s&p has been rangebound stuck i a range of 2700 to 2750. it's not showing signs o breaking out just yet though today it was encouraging and the strength stems from defensive groups such as utilities and telecom and real estate. that's generally not the kind of leadership investors want to see, but me crucial, cyclical sectors like industrials, and banks and semiconductors are down 4% in the last few weeks and a lot of big chip stos which were the market leaders are down more. micron, nvidia, and they've fallen

for "nightly business report," i'm diana olick in dover, maine. >>> united continental raises its rfull-y earnings forecast and that is where we begin tonight's market focus., after the be the airline reported better-than-expected results thanks to adding mor flights and in turn, that was raising its profit outlook, b united also said that rising fuel costs would cause it to trim its capacity growth estimates for 201 shares were initially higher in the after hours. they finished the regular dayp a fraction at 72.62. also out after the bell tonight, railroad operator csx delivered earnings that topped expectations. csx said it hoped to reach it by 2020. csx shares inibletially rose an thed e $64.44. >> charles schwab's profits rose at a faste than expected clip. total revenue at the brokerage also picked up and tped estimates. shares rose more than 3.5% to $52.88. omnicom group said that strength in e tope wasn't enough offset a loss of several clients in its domestic business. as a result,y the ad age reported weaker than expected sales growth and warned that revenue could stille pressure

diana olick. not hampton.ching "squawk box" on cnbc insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ >>> welcome back to "squawk box. the futures right now indicated down less than 100 last time we'll have to look there -- here it is. in fact, they've improved. moving into the number itself. maybe the -- people heard diana olick is going to be delivering the news today is she our new hampton >> she might be our new hampton. i don't know if she's our permanent new hampton. >> that's my question. anyway, down now -- hampton pearson retired after a distinguished career s&p 500 down 4.46. and the nasdaq down 5.3. in asia, this was the day everything going into effect but still green. not huge, but green arrows trade tariffs between u.s

diana olick has a preview. >> what else can i say it's the sign.nges coming we'll show you next on "squawk box. z. >>> we're back on "squawk box. that's a look at the futures this morning s&p would open higher by about ten points the dow would open higher by 45, we'll call it -- yeah, 45. and then nasdaq on the back of those amazon earnings looks higher as well by 28.5 points. >>> technology has had a huge impact on how we shop for, buy, and sell a home. but one part of the process hasn't changed at all until now. diana olick joins us with more on this. >> well, it's that silly old sign it's what most people see first when they're looking to move to a certain neighborhood or move within their own neighborhood. the for sale sign. now compass real estate brokerage which is a fast growing new kid on the block is disrupting the sign. this fall you may see this round interactive sign yes, it spins and lights up. if you have the compass app an your phone, it will send a notification about the property and of course will connect you the designer said he r

. >>> we're getting new data on the housing industry diana olick joins us now >> a slight dip in mortgagenothing to entice mortgage owners to refinance. refi applications fell 2% for the week and 28% lower than a year ago when interest rates were lower according to the mortgage bankers association volume hit a 20-year low this as the average rate dropped to 4.79% to 4.84% the previous week, borrowers putting 20% down the rates were below 4% for so long that more than half of all the homeowners have rates below 4% according to core logic even the homeowners who might want to tap newfound equity for renovations or something else are more likely to take out a second loan rather than to refinance their current loan at a higher interest rate home equity lines of credit are increasing as refinances decrease mortgage applications to buy a home were up 1% but lower than a year ago, that has more to do with the chronic housing shortage which is causing home prices to heat up again. prices jumped over 7% annually in may according to core logic, that was the biggest annual price jump in four years h

for nightly business report, i'm diana i olick, washington. >> so far in 2018 the airline and autors sec have underperformed the market as a whole. there are concerns that will continue as the industry's fight head winds in the months ahea phil lebeau has more. >> reporter: the future of autos ported and imported to the united states and how much they'll be taxed will be a focus for auto investors this summer and fall. others could follow if president trump pushes through higherff ta will tariffs drive up prices and hurt sales and speaking of sales. the biggest question for investors will be whether tesla can sustain a higherelivery rate for the model 3. will elan musk have to raise more capital for his thcompany. e big issue, jet fuel prices up 50% in the last year. could they go higher? that would push up costs. and prompt some carriers to cut flights in certain markets. nally, will demand remain strong? >> the robust economy and high consumer confidence have a lookingumber of people to fly this summer. will that continue this fall's th big question facing airlines and their invest

much more online back to you guys >> thank you very much diana olick. >>> as we've been talking aboutxciting day here at cnbc the delivering alpha conference taking place right here. joining us now is one of the panelists for the strategy session happening this afternoon. david villa. thanks for being here today. >> thanks very much. >> one of the huge issues facing pension funds everywhere we should point out you have 620,000 participants from the state of wisconsin that are relying on you one of the huge issues is trying to find return, trying to find alpha when looking at bonds trading at such low levels 2.85% right now for the 10-year. how do you do that how do you reach out and try to find additional returns to make sure these people will have enough money for when they retire >> well, i have pixie dust no, i did -- so there are two things compounding over long periods of time time we use to get to our target we make a promise easy to keep our discount rate is 5%. which is about 2% less than the average fund so the low bond yields are troubling. but they don't create as much pres

. >> what the future holds for the automaker next >>> first let's go to diana olick.ales, how do they look >> existing homes sales down the street was looking for 5.45, may's read was revised down as well 2% year over year, and because it's june's number, we now have the first half of the year down 2.2% why the weakness when the economy is improving, could be prices, median existing home price was $276,900 that is an all-time high, up 5.2% year over year the reason prices continue to gain is very low inventory but still at a 4 po.3-month sup. realtors say it could be a sign possibly of more homes coming on the market 26 days is the average it took in june, that's down from 28 days a year ago. all cash still very high at 22%, investors high at 13%, and first-time buyers still very low at 31% so weakness continues the third straight move of losses in home sales down 0.6% in june. back to you guys >>> stocks are a little bit lower here, geopolitical tensions are back, although three weeks up, as the biggest names report their earnings. boeing, the dow's heaviest weight p

diana olick joins us to sort it out for us diana. >> bill as values sky rocket so does the a equity they 7% in the first quarter of this year according to black knight. the largest single quarter growth since been tracked in 2005 homeowners have a collective 5.8 trillion in tapable equity, the highest recorded the average homeowner with a mortgage gained 1470 oh dollars in the toppingle equity over the past year and has 11390 oh available. but fewer people are doing that. home equity lines of credit were flat at the start of the year. and for those using them the amount cashed out at 2-year low. more people are doing cash outry financing which doesn't make a son of sense because interest rates are higher so they lose the rock bottom rate most have already done the refie on but the first loans are generally fixed rate and home equity lines are not -- homeowners do not want to gamble on the monthly payment more kevlt more numbers on line. realtime check cnbc.com. >> thank you this spring facebook was under fire for breaches of the user privacy and there was plenty of talk of fleeing as a

diana olick joins us now with the details.ght increase in the number of homes for sale may be helping the mortgage market. mortgage application volume rose 2.5% last week seasonally adjusted total volume still lower than a year ago according to the mortgage bankers association that's because of the weakness in refinances. now, mortgage applications to buy a home jumped 7% for the weekend, were 8% higher than one year ago potential home buyers have been blocked by a severe shortage of homes this year. still very tight but this is the first sign that the supply crisis may be beginning to ease a little bit and helping, too, the average rate on the 30 year fixed with 20% down fell to 4.76% just a little drop but despite that drop, refinance applications fell 4% for the week to the lowest levels since december 2000. all these numbers are on cnbc.com back to you guys >> all right thank you very much, diana ol k olick. >>> the center of the media universe is in the mountains of sun valley this week julia boorstin is there and has a s

. >> thank you, diana olick with the fomc minute. the rebecca pat certifies a contributor.oe shay is the analyst with pnc financial services it seems the fed is increasingly could go nizant of the trade wars and emerging markets and potentially europe >> yes and obviously it's a very difficult situation for the fed. they're not sure what's happening with the proposed u.s. tariffs with proposed retaliation by the trading partners they have to make a decision about something that may happen. i think they are baseline is like ours, that we get away without having too much -- too much trouble in the global trading system but certainly the fed needs to be prepared for that downside risk. >> it sounds like they are on the path to possible rate hikes but do you think they could pause and put growth sort of in the driver's seat when it comes to the decision as to whether or not to proceed as planned as opposed to the inflationary pressures they see and the inflaegsary pressures that may come because of tariffs? >> i mean, certainly that's a concern. i think that they may be watchin

diana olick in washington with the story. hi, di. >> hi, ty. it's because the supply is so low. pushes pricing to new highs. even current owners looking to move up having trouble finding anything affordable. that's why one strategy is gaining in popularity. the owners of this house in the increasingly popular capitol hill neighborhood bought a bigger house in the. they rent this out they went through several bidding warsen final they finally got this house they were able to afford the number new one but doing math on the old one. >> we ran the numbers. i literally made a spreadsheet and all the different options we stay in d.c. rent out san jose in d.c. all the options. it made the most sense to keep the house in d.c., rent it out, and buy here >> carrying two mortgaging can be scarey but realtors say lenders are making it easier because as interest rates rise they need more business. one word of caution though make sure you have a good umbrella policy on the rental home and make sure it's in top shape so the tenants aren't calling you in the middle of the night more nofgs on th

diana olick in d.c.at but let's begin in beijing and the fallout there. >> reporter: well, chinese authorities say that beijing had no choice but to fend off what it has described as the largest trade war in economic history. the foreign ministry confirmed today that china has launched its retaliatory tariffs immediately after the u.s.' move customs officials are already collecting duties on 545 items worth $34 billion matching the amount subject to u.s. tariffs the targeted products include crops like soybeans and cars tonight the commerce ministry said they're taking it one step further and they have brought the case to the wto. now, the chinese move is just escalating what many people here fear is going to become a protracted trade war president xi jinping doesn't look as though he's backing down and president trump also looked as though he's doubling down on his stance during a visit in montana when he threatened tariffs that could cover all $500 billion of goods imported from china now, people here

now in diana olick live with that story in maine. >> a big potential for expansion and big profit but. lumber producers do that fast enough we are in the middle of maine with answers and awful lot of lumber coming up next on power lunch. you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ are you ready to take your then you need xfinity xfi.? a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. >> tariffs on canadian lumber have been a been for u.s. producer but the demand is so great they have trouble ke

up -- no, not coming up the price of lumber thanks in part to tariff oz on canadian lumber dia diana olickmber company in maine with a big opportunity the price of lumber has skyrocketed, up 50% in the last year alone, and that's because of a perfect storm surrounding canadian supply, that is, first forest fires, then transportation issues, then u.s. duties imposed on canadian lumber it all spells a lot more green in these trees for u.s. lumber producers. here at pleasant river, they're already blasting new ground, getting ready to expand production by 50%. they are thinking $20 million into the upgrade and are expected to hire 40 new workers. it's not just the tariffs that are doing it, it's the confidence in the u.s. economy >> given the playing field, the economy has a chance to grow we're meeting production, we're meeting the demand growth. >> now, the canadian tariffs are giving u.s. producers both the confidence to expand, but there is something they need they cannot grow in this forest, and that is steel. the u.s. just imposed new tariffs on steel that they need to expand this mill.

of climate change and too much real estate development turned water from an asset to a liability diana olickon the rising risk of real estate >> as our weather becomes wetter, real estate is becoming a role in how we deal with water. one town in america is imagining a drastic solution >> reporter: it would have been called a thousand-year flood if the same destructive deluge had not crashed through ellicott city, maryland two years before. the first time around in 2016, on the city's nearly 250-year-old main street shop old owners like donna sanger worked tirelessly to rebuild. >> there was this enthusiasm, let's put on a show. let's bring the town back. >> reporter: but this time -- >> this is more like a funeral >> reporter: now they feel these floods are the new normal. because this historic town is a blip on the map but a blueprint for developing disaster. real estate development in the face of increasingly wet weather. joe sexton is a scientist who uses satellite images to map changes in ecosystems. you had two 1,000-year floods within two years of each other how did that happen? >> the

setting up >> all right >>> meantime, weekly mortgage application data released a short time ago diana olicks with more >> home buyers continue to pull back as affordability becomes a bigger issue total application volume fell 0.2% last yeek. the drop was all on the purchase side those applications fell 1% for the week to the lowest level since may. they were up 2% compared to a year ago potential buyers have been up against a pricey and limited market but supply did increase slightly in june according to the realtors so we should be seeing more purchase demand. prices, however, have not eased up applications to refinance a home loan did gain 1% for the week but were 30% lower than one year ago when the average rate on the 30 year fixed was 60 basis points lower 30 year fixed holding at 4.77% for borrowers putting 20% down rates did make an impressive move higher this week following that spike in the ten-year treasury when the housing market is this expensive, even small rate moves matter we saw a big drop in sales in june with core logic pointing squarely to high prices and higher interest