for nightly business, diana olick in w>hington. ell the housing market is cooling a bit across thetr co a deeper chill is setting in on one of the nation's morema expensiveets, new york city. and this is happening even as wall street pay rises. something that hasy historica helped lift manhattan prices. robert frank explains. >> reporter: it's a buyers mark in one of the toniest maal estate markets in the country. attan real estate now a one-year long correction. total salesling 11% in the third quarter. the fourth straight quarter of double digit decinne. acco to a new report from could douglas he willerman and samuel. the average price of a new york city apartment is down 4% toious tnder $2 million and the high end of the maraw prices fall 12%. as the rest of the country deals with a shortage of homes for sale, the listings in manhattan are now at the highest level since 2011. that's oversupply is contributing to the decline in sales. along with fewer foreign buyers. not even a rising stock market can lift hles. whre also hurting

for nightly business report, diana olick in washington. >> to earnings now in and proctor & gamble big day, the dow component reported strongest sales growth in five years and said it's raising prices on products. and that sent shares up the most in dade. sarah eisen looks at p&g's better than expected relts. >> investors cheering proctor & gamble's best gwth in five years. the ceo david taylor says when the improvement the are seeing it's broad and global. >> yes, a lot did come together in terms of the absolute tom line growth. but what you see in this trend, months ago, six months ago you saw north america, u.s. rather turning positive. now we ar positive on share on pass one, three, six months. you'veeen this the sequential improvement in china. now at sequential improvement in the -- our latin america business. we are starting to overcome some of the very invite headwinds in the middle east. we are making good sequential progress on india. but it's really focused on superiority of the brands across thee elements talked. and the productivity helped h offset wha been a very difficul

and as diana olick explains,th at couldn't come at a worse time for buyers. >> reporter: if you didn't lock inehe mortgag rate last week you are out of luck preponderates just took the biggest jump since november of 2016. the day after the presidential election when bond yields thrged. in jus past two days, the average rate on the 30-year fixed is up 14 basis points to now 4.94% according to mortgage news daily, the average for borrows with solid down payments and credit scores so you are looking at 5% and above for the noto pristine borrows rates are a full percentage poin higher t this time last year, the highest in more than seven years. in conjunction with hot home prices. the gains are s as sales slow but prices rise faster than incomes and in most major markets home prices are well above the last peak. so what ds that mean for home buyers? about $180 more on apaonthly yment for the median priced house. and it's not just thet payment lenders are strict on how much in debt payments you can carry vsus your income. >> with interest rates going up you have more people being declined f

in our continuing serhes on rising risks of extreme weather to real estate, diana olick looks now at high-tech solutions aimed at solving the problem. >> reporter: a recent day of heavy rain in albany new york caused this localized flooding. not a national headline but it hould be because of what increasingly frequent and heavier rainfls are doing to the bottom line of local economies across the nation. hitting both infrastructures and budgets. joseph coffey is albany's waterr commissi >> the extreme rainfall events are causing flooding, basements backups and combined sewer overflows to the hudson river zwloorom may through july the ut much of the east coast saw rainfall up tohree times normal levels according to the national oceanic and atmospheric administration. nine of the extreme prescription eenlts occurred since 1990 according to the environmental prection agency. the more water, the more expensive the damage. in albany alone two summers ago a few random rainstorms caused over $3 million in damage to suers, overwhelmed by unusually heavy water. so in albany's search for soluti

in our continuing series on the rising risks of extreme weather to real estate, diana olick is lookingutions for solving the problem. >> most of the nation's storm water systems are unable to handle the increasingly heavy rainfall and the more development the worse it gets. that's because there are fewer places for water to go instead of looking on the ground for answers, any compan new coe turning to the cloud a recent day of heavy rain in albany, new york caused this localized flooding not exactly a national headline, but it should be because of what increasingly frequent and heavier rainfalls are doing to the bottom line of local economies across the nation. hitting both infrastructures and budgets. joseph coffey is albany's water commission >> these are causing flooding, backups and overflows. >> reporter: from may to july of this year much of the east coast saw rainfall up to three times national levels. and extreme precipitation events have occurred more often since 1990 the more water, the more expensive the damage in albany alone two summers ago a few random rain storms caused

want it to be so perhaps those cases would not be in the first session but could come later >> diana olickh tenure thank you very much. >>> time to find out what's coming up on "squawk box." becky quick has a preview. a lot of news out there. i have a feeling the interest rate story will be on your radar. >> the great rate debate is there a couple other things i'm thinking about unemployment at nearly a 50-year low. talking about the economy here really booming, but then you start to hear things about the global economy and what's been happening. the imf downgrading its global growth picture to 3.7% from 3.9% that's the first time they've done that in two years you start hearing about the yuan rising above the 6.9 peg to the dollar we thought yesterday was the big move, but now it's above 6.9 then you hear about companies like ppg talking about what happened with earnings, warning they're not going to be making numbers, that's because prices are going up and because of the trade war, concerns about what they'll be able to sell. you add all that up, we're in october, it's a scary time of th

for nightly business report, diana olick in washington. >>> and to read more about the impact of mortgage rates at 5%, you can head to the website at nbr.com. >>> and i activistestor takes a stake in starbucks where we begin the market focus tonight. bill ackman of per shallin squaul capital revealed a 900 million position in the coffee chain. sayi stock could double over the next three years. and he added the reiler is one of the best positioned if minimum wages rise. starbucks ss it looks forward to a productive dialogue with mr. ackman. starbucks show to 57.7137 and tank other talk is heating up at papa joans. they are there are reports the fund management is considering a bid for the pizzae chain but ts no guarantee that a deal according to the "wall street journal." papa johns has been exploring a sale whie it tries to recover h the messy battle w founder and former kmarm and ceo. john schnatter. shares of papa johns jumped nearly9% to 54 pft.990. american airlis says fuel costs are rising and that it lofts $55re million inue last month due to hurricane florence. the fuel costs conce

diana olick, thank you very much. >>> good morning, welcome back to "squawk on the street."a eisen with david faber and mike santoli live from post 9 at the new york stock exchange carl has the morning off. >>> let's look at the markets. things looking better this morning. the dow is up 163 points thanks in part to what was a blowout sales number from procter & gamble got a lot to say about that one. consumers staples leading the s&p higher but it's broad. you've got all sectors higher right now. technology is coming back strong today. the nasdaq composite up 1% bonds and the dollar under pressure, europe is mixed and china bounced. >>> our road map for the hour starts with the markets. stocks trying to bounce back on this wild week of trading. solid corporate earnings giving the street a boost. >> speaking of dow, procter & gamble is soaring. the consumer products giant reports its best quarter in five years. sara is going to dig through those numbers for us. >>> he was once dubbed the next warren buffett the now former ceo of sears eddie lampert spoke with jim stewart and

back to you guys >> diana, thank you, diana olick in washington. >>> one group of people excited to seeinterest rates, savers after a decade of earning next to nothing on their savings accounts, the tide appears to be turning. let's bring in greg mcbride, sear vice president at bankrates.com. greg, great to have you with us. chances are, according to my notes, the highest rates you'll find won't be at your corner bank, the jpmorgans of want world. these are online banks >> exactly, melissa. you have to shop around for the best deals you can't sit back and wait for those better returns to come to you because a lot of the bigger banks have pricing power and they've been stingy about increasing the payouts online banks, by contrast, are in a bit of a price war, leapfrogging each other in terms of who can pay top dollars as savers and individual investors, we can exploit that to our benefit the top yields even on a savings account that's available nationwide, 2.25%. that's critically important, because the fed's inflation target is around 2%. for the first time in more than a decade, savers

diana olick's got all the numbers. hi, diana. >> hi. yeah, right. worst number yet in a string of bad housing data sales of newly built homes in september fell 5 1/2% for the month, down 13% annually to the slowest pace in nearly two years. this number is so critical because it measures signed contracts. that is buyers out shopping in september when mortgage rates jumped those buyers were making the calculation can i afford this home with these rates. and clearly a growing number were saying no prices were slightly down. but that may just be because more of the lowest-priced homes are getting deals, skewing that median number lower. mortgage applications to buy a home are now unchanged from a year ago, and sales of existing homes have been lower for the past several months. tomorrow we get pending home sales, which also measure signed contracts for existing homes watch for that right here on cnbc at 10:00 a.m. eastern time. and for a wrap-up on just how badly mortgage rates are hitting all facets of housing, that's up right now on cnbc.com. back to

diana olick has new numbers from washington hi, di. >> hi, ty.nd prices a toxic cockta cocktail affordability hit a ten-year low. they calculate that base tonight percentage of income needed to buy the median-priced home in the local market the average wage earner would not y'all phi to buy a median price home in 84% of the markets based on a 3% down payment nationwide the median home price was $250,000, up 6%, that's twice the annual rage growth and the average rate on the 30-year fixed mortgage is a full percentage point higher than a year ago regionally buyers it would have spend the most of their incomes to afford a median priced home in brooklyn, new york, san francisco and maui the most affordable markets, providence, rhode island, the philadelphia metro area and the chicago metro area the biggest drop in affordability compared to long-term averages came in denver, dallas-fort worth and grand rapids, michigan ing to jobs have moved into the area pushing demand for housing and consequently home prices higher very quickly. back to you. >> dia

is it deja vu all over again >> diana olick joins us from washington with the details. >> look, as home values rise and more people want to be homeowners, it's inevitable. more people will lie and cheat to get a mortgage. mortgage progress jumped over 12%. that's the highest level since they began tracking it during the mortgage crisis in 2010. core logic looked at instances of fraud and income identity, and occupancy among other things the biggest jump was in misrepresenting your income. lenders are pretty strict about how much debt you can carry. people are kind of juicing the numbers now, all this means more risk for lenders and mortgage investors. if a loan is sold to fanny or freddie, the original lender can be forced to buy it will back. states with the highest risk of fraud are new york, new jersey, florida, d.c. and new mexico california, the priciest real estate market ranked ninth, all of this is easier to do, how thanks to the internet i did a quick search online using some words about income verificati verification, and i found a bevy of sites that would generate fake pay st

diana olick live in washington with more. hi, di >> you're right.ns on earnings thanks to solid sales and higher prices in the third quarter. that has the stock higher for the day but way down 35% year to date new orders also came in below expectations up just 1% compared to a year ago. and that's in a housing market where there is a shortage of existing homes for sale. affordability is the problem pulte's average home price jumped 7% from a year ago to 427,000. and ceo ryan marshall was optimistic but realistic about the current market saying that while buyer concerns around affordability and rising mortgage rates appear to have impacted near-term market dynamics traffic trends indicate buyer interest levels are still high home builders a bright spot in today's sell-off best day since august 21st but worst month so far in eight years. but well off their january highs. despite solid fundamentals and low supply and strong demand in housing. just a note, we get september sales of newly built hold tomorrow morning at 10:00 a.m. eastern time also if you

diana olick has the numbers for us. hi hi, diana. >> reporter: hi, scott.ome sales gained -- so buyers outshopping during the month and figuring out if they can afford the home at today's higher mortgage rates. yesterday we saw a steep drop in contracts on newly built homes. those homes come at a price premium and builders aren't just not lowering prices yet. the gains for existing homes delivered across the nation with the south losing ground probably due to the hurricanes, but the west gaining as more supply hit the market. now the realtor's economy economist says more supply is helping. back to you. >> stay where you are. let's bring in our friend, wharton school professor, susan, good toe sue. you say we're at peak housing, what does that mean and how did we get here? >> we're at peak housing supply, construction is still at lows. we're near recession lows in terms of our long run history on construction starts and i don't see them going up significantly from here either in the multi-family or the single family. so we're peak in that sense. housing pric

diana olick with a check on how the home builders did during the month. >> despite strong, from the biggest. home construction heatiev including names like d.r. holton, home depot and sherwin williams is off 11 percent for the month and 30% year-to-date the first drop in the year coincided with a pop in mortgage vats and then this month even a reaction to another bump in rates in sense they lowered its guidance siting softening demand and they are down 7% for the month. the builders do have a long run weigh ahead. the problem, of course, is price and weaker affordable. guys, back to you guys. >> plenty of concern about housing. thank you. let's get to jackie d'angelis at the commodities desk with energy's big monthly moves jackie. >> good afternoon, sara. an ugly month for oil prices which typically drive the action in oil stocks as well. wti falling about 10% in october. that's its worst month in two years and the s&p energy sector. it also dropped a little bit more than 10%. no coincidence there the reasons that oil dropped concerns over global demand. supply concerns. they seemed a littl

that is the line in the sand diana olick joins us more with the impact of rising rates hi, di >> hi, ty. it's the combination of rising mortgage rates and overheated home price that's have slammed affordability. take a look at rising home prices in the past two years, passing the last price peak from the housing boom, all because of the supply shortage. now the price gains are starting to shrink, but that was before rates jumped affordability had already been hitting a wall rising rates will now put even more pressure on prices as 5% is the new normal on the 30-year fixed. so on a $300,000 loan a 5% rate versus 4% on an average a year ago is about $180 more on that monthly payment. for some buyers that's going to be a problem but the new chief over at the mortgage bankers association points to other factors. >> well, of course i'm concerned but i'm optimistic because the economy is so strong that millennials are out buying houses and the demand for house's really high. >> now, we get three more important housing data points this week. mortgage applications and new home sales wednesda

stuff to do if you can separate the emotions >> what's awesome to me is lennar has been catching a diana olick had a great interview with the chairman of len you see in gaining momentum to the upside. maybe this is the laggard in a terrible tape where it corraly. >> coming up it's the showdown of the century president trump calling the federal reserve crazy and out of control. and blaming it for the market selloff. while the fed chair, does he fight back details. >> plus judgment day for the banks hours away make or break moments for the markets? we tell you why this could be the most important earnings season ever. later high flying techs getting crushed. but guy says there is a name that's a screaming buy he gives us his fast pitch ci, choryomes square, new rk tymu me "fast money" right after this experience a blend of refined craftsmanship... ...and raw power. engineered to take the crown. the lexus ls 500 and ls 500h. experience amazing at your lexus dealer. >>> welcome back to "fast money. chaos reigns in the markets. the s&p down almost 7% from the 52-week try. and president trump isn't

diana olick has that story >> the two are a toxic cocktail for housing affordability.nd of the third quarter affordability hit a ten-year low. that is calculated based on the percentage of income needed to buy a home in the market the average wage earner would not qualify to buy that median priced ohm in 80% of the 440 largest counties surveyed. nationwide, the median home price of 250,000s was up 6% from a year ago, twice the annual wage growth. the average year on the 30-year fixed mortgage is a pull percentage point higher than a year ago regionally buyers would have to spend most of their incomes in brooklyn, new york, the san francisco area and maui. the most affordable markets are providence, rhode island, the philadelphia metro area and the click go metr chicago metro area denver, dallas, ft. worth and grand rap pits michigan have the most affordable markets. >> if you try to look at the lfgt tre long-term trends what is driving prices >> supply and demand right now we have very little supply and a lot of demand we will see that if job numbers continue to grow i

pursuing >> meanwhile, another big bank ramps up the presence in the subprime mortgage business diana olickhis new old trend, i guess. diana. >> what if i told you there is a program offering no downpayment mortgages to borrowers with poor credit and backed by bank of america. this is not the old subprime this woman wanted to be the first in line. >> i left home at 4:00 this morning. >> first to apply for a no downpayment low interest mortgage at a special four-day event in miami. >> i did own a home in the past and went through foreclosure i'm ready to purchase a new home. >> no downpayment, right. >> the event is one of several being held in cities across america this year run by the non-profit brokerage, neighborhood assistance corporation of america >> it's a national disgrace about the low amount of home ownership, mortgages for low and moderate income people and minority home buyers. >> bank of america is fueling the program with $10 billion in mortgage commitments >> do you see any risk to bank of america. >> no, it's total upside we have seen significant wins in in partnership >> no

. >>> diana olick has new home sales numbers for us in washington diana?huge miss, the number came in at 553,000 seasonally adjusted for new home sales in september. the street was looking for 625 and the august number was revised down substantially so a big drop, 5.5% month to month on newly built home sales. this is an incredibly important number because september is when we saw mortgage rates spike and these numbers are based on signed contracts, people out shopping, looking at newly built homes in the show rooms and deciding whether or not they can afford them at this new mortgage rate up over 5% now so clearly they're saying they can't. that big drop, we saw inventory of new homes go up to a 7.1 month supply we were at a 6.1 a month ago so more new homes available but people are not buying them also the median price of a newly-built home, $320,000 in september and that's a drop of 3.4% year over year so builders seeing prices come down whether it's not the mix of homes selling, lower priced homes are sell thoorg builders are saying, look, we can't get

and horton higher rates are making it impossible for buyers to get into the sub prime right now diana olicking us bank of america is backing it. it is not the old subprime >> she wanted to be the first in line >> i left home about 4:00 this morning. >> reporter: to apply for a low down payment at a special four-day event in miami. >> i did autoho home in the pas and i went through foreclosure >> no down payment, right? >> reporter: the event is being held in cities across america this year run by the corporation of america >> it is a national disgrace of the load amount of homeowner ships for low and moderate income of people and minority home buyers. >> reporter: bank of america is fuelling the program with $10 billion in mortgage commitments. >> reporter: do you see any risks to bank of america >> it is upside. we have seen significant wins in this partnership >> the mortgages are at below market rates of 4.5% they are fixed rates of 15 or 20 years. barrowe borrowers have to go through full documentation to prove to repay the bill >> diane , thank you. we ask you to tweet us what you pay

dia dia diana olick joins us. >> some of us remember when mortgage rates were three times what they are. the last time the average rate on the 30-year fixed crossed 5% was almost eight years ago, and that was only briefly. it hasn't really been sustained over 5% for at least a decade. a year ago it was just below 4 and two years ago it hit a low of 3.5%. what does that mean to borrowers? for example on a $300,000 loan you're paying about 200 bucks more per month than you would have a year ago, but it's not just the payment it's qualifying for the loan and also feeling good about buying at that rate consumers and investors have felt very good for a while but robert shiller says that's not always a good thing. >> the economy seems to be coasting upward, but this kind of complacency, this kind of confidence i think is volatile. >> the only good news for this winter's buyers is that higher rates could mean sellers finally set their sights closer to earth and cut the red hot prices we're seeing today much more on cnbc.com. >>> for more on the impact of a 30 year fixed mortgage rate hitting 5

. >>> welcome back to sweet, i'm diana olick with breaking news from the realtors.pending home sales in september up 0.5%, that's the ninth straight month of annual sales declines this measure is of signed contracts to buy existing homes so people shopping in sent when we saw mortgage rates jump realtors are saying this game could be because there is more supply on the market it could be folks are seeing the rising interest rates and those on the fence decided to jump in. in the northeast sales down, sales up in the wez. sales were up in the month but down 7% from a year ago and in the west prices are highest in the nation in the south where we saw the impacts of hurricanes sales fell but we're up 3% year over year realtors are saying they're an eck totally hearing more people talk about renting and rising interest rates.anecdotally heare talk about renting and rising interest rates >>> welcome back to "squawk on the street," i'm carl quintinilla with sara eisen and david faber. dow being helped by microsoft and other names following microsoft's earnings last night,

diana olick joins us from miami's headquarters with lenard executive chairman stewart miller. >> it is a one-two punch for the builders and who better to talk about that than stewart miller you reported positive earnings last week, but weaker guidance why the weaker guidance? >> we have a very solid program that backs up wherever we are in the economy. at the end of the day, as we highlighted, it is the combination of both higher prices as you've been reporting on for quite some time and together with the acceleration with adjustment of interest rates that's a one-two punch higher prices mean higher down payments and high monthly payments and high trer raer int rates accelerate that payment as well. >> do you believe what the fed is doing is right, continuing to increase interest rates the rate they are >> the fed has a tight rope to watch. we respect like many independents of the fed. would we like them to slow down the pace of course we would they have more data than we have but the economy has been strong. we know that the labor market is very tight and at the same time, the impact

diana olick has more what do we make of all this weakness >> reporter: this number was particularly weak and we weren't even expecting anything great. sales of newly built homes fell 5.5%, slowest pace in two years. this number is so critical because it measures signed contracts. which means buyers out shopping in september when mortgage rates jumped those buyers were making the calculation asking can i afford this home with these new rates and clearly a growing number are were saying no scott and natasha put a ghos on on -- deposit on a new home in austin but construction is taking longer than expected and their rate lock expired. >> there is a lot of uncertainty as to what we will be able to afford by the time we lock in an interest rate. >> we thought we had a plan, but now we're just really nervous. >> reporter: and mortgage applications to buy a home are now unchanged from a year ago and sales of existing homes have been lower for the past several months tomorrow we get a read on pending home sales which also measures signed contracts. watch for that right here at 10:00 a.m. eastern

. >> diana olick thank you. >>> oil prices dropping. $70 yesterday. check it out, 68.68 for wti.rs. >>> first, check out the trading picture in europe right now. germany's flat but france is a little higher, 0.4% ftse flat, too stick around, you're watching "squawk box" right here on cnbc. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ ♪ ♪ daddy, mommy's on the phone! hi! how are you guys? ♪ >>> welcome back to "squawk box. futures now down just under 50 points 47 and change. on the dow, nasdaq, down 14. s&p down just under 6. treasury yield, they were just about under -- they are now, under 3.2. 3.198. joining us now, the fixed income strategist at merrill lynch. and u.s. trust and john kilda, former partner at capital. a cnbc -- disock d-i. was there anything in your motion, john, on oil, we saw runup that we saw disruption in the gulf, now it's coming back down, from michael, i'm talking about? >> yeah, i think most certainly. the market g

the figures released a short time ago diana olick has more on this story. >> yeah. down drop sound now it's a big drop. go for it. all right. most of that was probably part of it at least due to the columbus day holiday there was no adjustment for that really it's rising the interest rate here. 7.1% this week applications to refinance which are highly rate sensitive, they fell 9% for the week and were 353.5% lower than the same week a year ago rates have moved a quarter of a percentage point higher in just the last four weeks. they're now more than a full percentage point than a year ago. refies used to make up a third of the volume. the rate is at the highest since february of 2011 and solidly across that line mortgage applications to buy a home also fell sharply down 6% for the week they were 2.5% higher compared to the same week one year ago. home buyer demand has been very strong, but affordability was week even before interest rates started to rise. now you have the combination of rising rates and higher home prices knocking a lot of buyers out of the market. a

diana olick has the recent numbers. shows the borrowers don't seem to like a five in their mortgage rate. that's what they got for the first time in eight years. so mortgage application volume fell 1.7% for the week according to the mortgage bankers association. seasonally adjusted report, volume was 15% lower compared to a year ago now, refinances fell another 3% for the week and were 32% lower than a year ago. applications down 39%. the refie share two years ago was 62%. now, interest rates are nearly a full percentage point higher than they were one year ago. the average rate on the 30 year fixed crossed over to 5.05%. that's for loans with 20% down the highest since early 2011 and that's an emotional line even if it's not historically high now, in order to afford more home, more buyers today are turning to riskier adjustable rate mortgages they have lower interest rates for their short fixed term but then can adjust higher since the end of august, the arm share has increased to 7.3%. and that as the 30-year fixed ra