diana olick is talking about the hot spring market being too hot for some.t's tuesday, april 2nd, 2024. you are watching "worldwide exchange" here on cnbc. >>> welcome back. i'm frank holland. let's get you ready for the trading day ahead. we check on the u.s. stock futures after the mixed start to the week. the dow is looking to open about 150 points lower. we are looking at the dow's pre-market laggards. united health. we just talked about the impact about health care providers. the shares are down 4%. that is followed by walt disney. critical week with the shares down .25%. goldman sachs with the number three spot. >>> we want to get a look at the yields market on the back of the pop of the pce. the ten-year note is at 4.32. we checking on that throughout the show. >>> israel is carrying out the strikes on the iranian consulate. that is increasing concerns that the conflict could expand and impact oil supplies. wti is hitting $85 for the first time since october. right now, it is trading at $85.21 a barrel. it looks like it is hitting the highs of the mor

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of renting versus owning is starting to change in a big way thanks to soaring mortgage rates our diana olick has that story diana? >> jon, the rent versus own math used to play out different city to city. home ownership has become so expensive that rennting a home s cheaper than buying one in all metropolitan markets and that's from bankrate which compared monthly mortgage payments to current rents. the monthly mortgage payment for a median-priced home for $112,000 was 2,703 as of february of this year and that includes property taxes and insurance. so compare that to the national monthly rent of $1,979 which includes renter's insurance. that's a 37% gap between the two, but in 21 markets that gap is actually 50% or more. those markets include san francisco, seattle, salt lake city, austin, denver and dallas. cities with the smallest gaps, although still more expensive to own, include detroit, pittsburgh, philadelphia, cleveland, st. louis and tampa these numbers are as of february when rates were slightly lower than they are today. rents are easing despite rising demand because there's so m

diana olick reporting. >>> shares of tesla lower after a big miss first quarter in deliveries. our trader if it's time to buy the dip or stay away. that and more when we come back in two minutes. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic. rich is being able to keep your loved ones close. and also send them away. rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts. >>> shares of united health and the biggest reason for the dow's big drop today. joining us to explain what is ailing unh and other health insurers, bertha. >> it's basically medicare advantage. there facing disappointing payment rates for 2025. a higher medical usage among seniors and others already pressuring markets. the seniors for medicare and medicaid say in 2025, there will be a 3.7% payment increase on average. in january, people that there were going to raise it more. scott fedele says the effective rate amounts to is 16 basis point cut between other factors. for

cnbc's diana olick has more for us.t differently from city to city. renting a home is cheaper that buying. in a new report to bank rate, which compared mortgage payments to current rates. the monthly mortgage payment for a median sized home, around $412 million, is $2,300, including property tax and insurance, compared to rent of 1979, which includes renters insurance, that's a 37% gap between the two. you see why people are renting now, chris. >> diana, really quickly, are there bargains anywhere. >> reporter: no. that's the short answer. in 21 markets, the gap is bigger, 50% or more, and that's like san francisco, seattle, salt lake city, denver and dallas. cities with the smallest gaps, though it's still more expensive to own, detroit, pittsburgh, philadelphia, st. louis, cleveland and tampa. these numbers are as of february. i hate to say it but mortgage rates have gone up since then. the gaps may be even bigger. again, renting is going to be cheaper in most places. >> thank you very much, diana olick, appreciate it

cnbc's diana olick shows us how it's done and what it could mean for an entire industry. >> reporter: product of design work done by architects. >> oh, i like the second one. >> reporter: but this artificial intelligence program is looking to disrupt the industry. meet vitruvius. it is the brainchild of jason ballard, ceo of i con, a robot ic construction company that brought the first 3d printed community to austin, texas. >> the big vision of vitruvius is to go all the way to delivery, construction documents, budget schedules. >> reporter: the program lets you design a home with detailed floor plans. the future, ballard says, will include electrical, structural, plumbing, and mechanical in delivered plans, all to make the usually pricey process cheaper and faster. >> i'd like a log cabin-style vacation ski home. vitruvius asks you questions and learns from your answers incorporating knowledge from every design it's ever seen. >> i'd like an open floor plan for a family event. >> i tried it out with ballard's help. >> it's got the fireplace in your bedroom, as you have asked, and it'

for more on new home sales, let's head east to diana olick diana. >> rick, this is a surprise to theide, but not totally unexpected because i want to look at mortgage rates specifically we know that today's buyers are incredibly rate sensitive and while in february the 30-year fixed was solidly over 7% for the month in march it was a mix. it came down, it went up a little bit and came down again we know the big builders are buying down mortgage rates and some of them are lowering prices we saw the median price of a home sold $470,000, down nearly 2% year over year. builders pulling back on prices and offering incentives we see i want to turn to pulte which just reported earnings this morning. the third largest home builder reported a strong first quarter earnings and increased guidance and did not lower prices they raised them slightly which helped juice their margins and they are using rate buy downs saying the average buyer was getting a 5.75% starting rate as opposed to the 7% rates we're seeing now they did not -- they did note a sharp increase in first-time buyers but given the

diana olick.ause we did get a rare miss on the economy 1.6% gdp for the first quarter this is the advanced look, the first look and 2.5% the expectation. atlanta fed, which we've been reporting on a lot was tracking more like 2.7% so that was the weakest and you can look at the bar chart to show what an outlier it's been given the strong growth. that was the weakest level since the second quarter of 2022 look at the bond reaction, usually buy bonds on a weak economic number but the bond market likely teeing off the price deflator we get across the three months of the first quarter. the core number there at 3.7, there's the gdp, it shows you the lower growth we are just encountering in the first quarter, the pce deflator for the first quarter at core was 3.7% and that was almost double the 2% that we saw in the fourth quarter of last year also beating the 3.4% expectation. it was a bad mix of weaker economic growth and higher inflation, which does tilt the risk to the upside for pce tomorrow, which

. >>> coming up on "worldwide exchange," diana olick shows us how one big building in the big apple canhe real estate sector. >>> first, costco's most in demand product is getting more popular. the retailer is selling as much as $200 million in gold bars this month. yes, actual gold bars. costco saw sales in their debut in late august and november. my question is where do you put them? where do you put them? it's not just the cost of gold moving higher. the u.s. wants to raise the price of stapp. if approved, it would mark the fourth increase since the start of last year. >>> the battle of the chicken sandwiches is back on. shake shack is throwing shade at chick-fil-a during its april and may promotion. it will offer chicken sandwiches seven days a week. chick-fil-a has been closed on sundays since its debut. i never ied trthe sandwiches, but if the war heats up, as a journalist, i might have to give it a go. more "worldwide exchange" coming up next. what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope

. >> diana olick, thank you very much >>> higher rates and weaker sales not being felt at dr horton,ch beat on the top and bottom lines our next guest had a buy rating on the stock, and even his expectations were beaten john lavallo joins us now. what do you make of dr horton, john, and its report >> tyler, thanks for having me a lot of the things that diana described are exactly what's happening or helping the new home market. there's little existing home supply, underlying demand is still very good. all that demand is being channeled to the home builders the home builders on the public side are taking a lot of share from the private what dr horton reported was a strong quarter across the board. they took their outlook up everything is pointing in the right direction for these builders to continue to operate, even at a higher interest r5i89 environment. let's not lose sight of the fact in october and november of last year, rates were 60 basis points higher than today, and the company still continued to operate very effectively >> i'm interested in one of your surveys. you say 34% of

let's bring in cnbc's diana olick for more. di diana?are rough today, because higher interest rates mean tougher dealmaking and tougher refinancing. usually strong apartment sector, take a look, alexandria properties down close to 5%. camden down 3% and equity residential down. equity still up year to date. digital realty, who doesn't love a.i., but no love there today. still way up, though, year to date. and office, as you said, boston properties way down, 6%. as office vacancies nationwide hit a record high. that's why we see this drive to convert office to residential. and that's what you're seeing here in lower manhattan. a 1970s office tower now a 30-story luxury apartment building, converted by the van barton group. only 5% to 8% office conversions work due to zoning laws, covering location, and age of the building, basics like windows which usually don't open up in offices, but have to in apartments, and that can be a financial deal breaker. >> i think it's when you start to have multiple strikes against you, right? it's the windo

cnbc's diana olick has more on that story diana, given u us the facts. >> okay, courtney.map used to play out differently city to city, but home ownership has become so expensive that renting a home is now cheaper than buying one in all 50 of the largest u.s. metro markets and that's according to a new report from bankrate, which compared monthly mortgage payments to current rents. the monthly mortgage payment for a median priced home, around $412,000, was $2,703 that includes property taxes and insurance. compare that to the national monthly rent of $1,979, which includes renter's insurance. that's a 37% gap between the two. now, in 21 markets, the gap is actually 50% or more those include san francisco, seattle, salt lake city, austin, denver, and dallas cities with the smallest gaps, though still more expensive to own include detroit, pittsburgh, philadelphia, cleveland, st. louis, and tampa now, these numbers are as of february, when rates were slightly lower than they are today. rents have been easing despite rising demand, because there is so much new supply coming o

diana olick has that story >> rates rose for the third straight week last week. average on the 30-year fixed increased to 7.24%, with loans 20% down as a result, applications to refinance a home loan, which are most sensitive to weekly moves and interest rates, fell 6% for the week they were 3% higher than a year ago. applications for a mortgage to buy a home fell 1% for the week and 15% lower than the same week a year ago, as home prices rise, along with interest rates, potential buyers' purchasing power are suffering a double whammy as off what happens, the adjustable rate of mortgage applications rose to 7.6%. arms can be fixed up to ten years, although they're riskier loans. these numbers were for last week let's look at what's going on today. rates dropped a little bit to start this week according to mortgage news daily, but made a tiny tick higher to 7.39%. the next potential big move would be on the monthly employment report at the end of next week, tyler >> diana, thank you very much. >>> the senate, as you probably know, has passed a bill that potentiall

and diana olick has the move >> yeah, the average rate took a big leap after that inflation data thisning. 7.52% is the new rate, according to mortgage news daily, the highest since early november april has been ugly to say the least. at the end of march, we were 6.91%. so what does that mean for buyers in the spring market today? say you're buying a $400,000 home right around the national median the monthly payment today is $128 more than it was just one month ago. that's if you have solid credit and are getting average rate even with small rate moves, some people on the margins will now no longer qualify for that mortgage consumers were clearly worried about rates that they would go higher we saw it in the pending home sales data for march rates were mixed in march below and above 7% but not this high. we saw sales pop over 3% higher, which was unexpected it may be because buyers wanted to get in before rates went higher smart move we are now seeing a larger share of home buyer supply for adjust about rate mortgages which can be fixed up to ten years still considered riskier loans h

diana olick joins with us the la latest. >> strong demand and tight supply continue to push prices higher, even though rates are moving higher again. home prices in february jumped 6.4%, up from january's increase of 6% according to the national home price index. it was the fastest rate of price growth since november 2022. now, after cooling last year, home prices are again near all-time highs nationally, and already they are in certain markets. for the third straight month, all 20 cities in the index saw annual increases. four of them at those all-time highs. san diego, los angeles, washington, d.c., and new york. san diego saw the biggest gain overall. prices there up 11% year over year, followed by chicago and detroit, which saw 9% price gains. portland oregon, the smallest gains but still up 2%. sit a three-month moving average, so it goes back to december when rates hit their recent lows. they are, of course, way back up again, now over 7.5% today. there was a strong expectation back then that the federal reserve would lower interest rates, and that may have driven buyers to jump in

diana olick has a deep dive on the numbers. >> melissa, home prices in february were 5.5% higher thanary of last year, and the price gained from january to february was actually nearly twice what it was historically p prepandemic, suggesting that this spring's market started out very strong, despite another rebound in mortgage rates. the trouble, of course, continues to be lack of supply, which is 40% below where it usually is, because of that lock-in effect of current homeowners who won't sell because the cost of moving up is so high. how high? well, in the 22 years before the fed started raising rates, for the average homeowner, moving to a similar house, say across the street, wouldn't change their monthly payment at all. upgrading to a 25% more expensive home would increase their monthly payment of principle and interest by 40%, or about $400. now, fast forward to today, and for home owners who have rates near record lows, buying ing o home in the current market would increase their monthly payment by 60% and trading up to a 25% more expensive home would result in a 132% increase

diana olick joins us now from lower manhattan to explain why. what is going on here?ll, good morning, andrew. i'm standing on top of pearl house, the largest office to apartment conversion to date. not every office building can be converted. around 5% to 8% of them only nationally. this was a half million square foot 1970s office tower. it is now a 30-story luxury apartment building, the van barton group purchased the building a decade ago, knowing that the single tenant would have moving out leaving the building entirely vacant. they could have bought it today at a much bigger discount, but the math still works. >> the way we really look at it is how will institutional investors value and ultimately pay for an almost 600 unit market rate apartment building such as this, and it far exceeds both the acquisition costs and the construction costs to convert it into multifamily. >> now, the biggest roadblock to conversions like there is zoning laws, what can and cannot be converted depending on location and age of the building and basics, like most office buildings, window

let's get to diana olick. >> hey, carl good morning existing home sales fell 4.3% in march to an annualizedy better than expectation sales, still down 3.7% year over year the sales are based on closings so contracts signed in january and february mortgage rates stayed lower in january and shot higher in february inventory did improve up 4.7% to 1.11 million homes for sale at the end of march, a 3.2 month supply inventory is up 14.4% than march of last year but more supply is not really helping home surprises. the median price of an existing home in march was $393,500 up 4.8% from the year before and the highest price ever for the month of march the market is moving faster with the typical homes sitting on the market 33 days compared with 38 in february. investors pulled back a bit making up 15% of sales compared with 21% in february and 17 in march of last year first-time buyers made a big comeback 32% up and 28% the year before not helped much by mortgage rates which moved higher this week again. >> there you go. thank you very much. appreciate it. especially on the higher prices which has

diana olick, my deguru on all o this, she sees 7 as this watershed or rate too far kind of idea.s the one way to think that would be good is a rate as opposed to the one that the fed is pushing up. so i don't know how this -- >> i don't think people are selling. >> but how do you -- >> how do you get them to sell? >> they're not going to sell unless the market -- it has to be within 1 or 2% -- the mortgage rate has to be within 1 or 2% of the current rate that they have. >> for the economy -- >> do you want -- >> you cannot have a 3% difference. >> do you want the housing market -- do you want that activity to be spurred again? don't you want it to be restrictive in some way? >> i have a personal interest in this, but i would like young people to be able to go out and afford a home. that to me seems to be a basic kind of goal for economic policy. >> but if that's the case, you need two things. >> policy is not delivering that, we need to figure out and get policy right. >> you don't have this problem. your kids are young! they're 20 years from owning a home. >> you need, "a," sel

you just keep renting or sell your house and rent what's going to cost you less in the long run, diana olickquestion. what do you think, diana >> the rent versus own mathewsed to play out very differently city to city but home ownership has become so expensive that renting a home is now cheaper than buying one in all 50 of the largest u.s. metro markets. that's according to a brand new report from bank rate which compared monthly mortgage payments to current rent payments the monthly mortgage payment for a median priced home, which is around $412,000, was $2,703 as of february of this year that includes property taxes and insurance. compare that to the national monthly rent of 1,979, which includes renters insurance so that's a 37% gap between the two of those but in 21 markets the fgap is 5% or more, those include san francisco, seattle, salt lake city, austin, denver and dallas. cities with the smallest gap but still cheaper to rent include detroit, pittsburgh, philadelphia, cleveland, st. louis, and tampa these numbers are as of february when rates were actually slightly lower than they a