Up his sleeve . Im melissa lee, coming to you live from studio b at the nasdaq. On the desk tonight tim seymour, karen finerman, dan nathan, and guy adami. And we start off with a stat we havent seen since the turn of the century. The average rate of a 30year fixed mortgage climbing to its highest level in 23 years. And Monthly Payments are rising at a staggering rate. Cnbcs diana olick has the details. Diana . Reporter melissa, Mortgage Rates have been on a tear, and there appears to be no relief in sight. The average rate at 7. 65 today, according to mortgage news daily, up from 7. 08 just a month ago. And up from 2. 8 two years ago, which was the record low. To give you an idea of what that means to a home buyer today, well, if you were going to buy a 400,000 home with 20 down on your mortgage payment, is now 920 per month more than it would have been just two years ago. Add to that higher home prices and you can see how affordability has just been crushed. Now, we saw it in the pending home Sales Numbers out this morning. Down over 7 from july, and down nearly 19 from a year ago. Higher Mortgage Rates are not only hurting home buyers, they are keeping potential sellers in place, because the vast majority of current borrowers have rates well below 4 , so, why would they want to trade up to nearly twice that . The Home Builders are buying down Interest Rates for new buyers. The builders up today, though, likely because of that disappointing pending home sales report. Builders are benefits from the lack of existing homes for sale. Melissa . Diana, karen has a question for you. Yeah, so, we know that some structure issues, people have to move at some point, regardless of how good their mortgage is, but do you think were going to see a pretty significant decrease in home prices because of the lack of affordability . No, actually, were not. And thats whats so strange, because historically, when Mortgage Rates go up and the cost of buying goes up, the prices go down, because people cant afford it, but we have this terrible supply demand imbalance. We have nothing for sale on the existing side. And thats why whoever is out there buying is finding competition for that two or three houses out there on the market. That competition leads to bidding wars, leads to higher prices. Its more about getting more inventory onto the market and you say people are going to have to sell at some point, but a lot of those baby boomers that we expected to get out on the market, they are just aging in place. Tdiana, thank you. 920 more a month versus two years ago. What else is higher versus two years ago . Everything. Everything. So, how is the consumer going to fare . Thats the question. How are they going to fare . I dont think they can. And weve been concerned, and we say all the time, never underestimate their want, but should they be spending in this environment . Where does it come back in the good news for today, in terms of broader market, quickly, the reversal in bond yields were interesting. And we talked about it last night with andy. They thought 10, 15 handles up. You got eight handles up in the tenyear, closed lower on the day. Good sign. Thats why the market reversed. In terms of the cob schumer, i dont think it goes well. The xrt which is not a great etf in the way its structured thats the one that everything watches, i have to tell you, closed around 60. 57 or so is your line in the sand. You get through that, and youre going to have a world of hurt. Back on this home thing, if you are a blackstone and you own hundreds of thousands of homes, wouldnt this be an interesting time to start selling and put that money elsewhere . It looked not so great for them not that long ago. Right. Im surprised that we havent seen more supply come on the market. The last sorry. Go ahead. The last time we had this type of a notice bond yield spike is when we had the conversation about some of the biggest reits that have been family office, consumer, advisory, wealth managers, its been a haven for collecting yield. And its been a great place to be, and for blackstone, who i continue to think are at least some of the smartest guys in the room. I mean, its been a huge, huge product, but i get back to the market that we have, weve had such a big move in rates, i still actually think equities have behaved okay given that. And i think if you look at where sentiment has gotten over the last couple weeks, whether youre measureing aaii, measurig the name index, which is active money managers, people are beared up. And theyre beared up going into the fourth quarter, which, you know, kind of makes me feel decent about things. I dont think were going to go a lot higher. The Government Shutdown has something to do with what the bond market is doing here, because people are doing the math on all the fiscal dynamics that arent really going to get better, but moodys has made it clear theyre following some of these shenanigans. You think about the price action, the reversal we had over the last couple days, and how much we are off of the lows, and you look at just the structure of the chart, the s p 500, really does feel like it ripped into month end, quarter end. Its been a really crappy month. The s p was down 6 . The nasdaq down 7 . You look at the sectors, we were talking about Home Builders, they were down 10, staples were down 10 . So, there was, like, a correction in the market. And the broad market felt kind of orderly. You want to bring it back to Home Builders, this is the one that we think is so rate sensitive. We were talking able williams sonoma, breaking out to new 52week highs. On the flip side, Restoration Hardware that looks like its going to die. Theres a lot of cross currents. And home depot, below its 200day moving average. Its really been range bound this entire year. I think its not such an easy trade, to your point, about blackstone, i mean, i think if they put a lot of inventory on the market, i think it does what you ask diane nashgs it puts pressure on prices, because i just i do, too. Not a lot of folks diana is great at what she does, shes being doefr it fordoing it forever. I dont want to argue with her. If affordability really is housing prices, you could buy two times as much house if rates were one half of where they are today. And thats, to me, just the math around whats going to happen with housing prices. I realize that supply demand dynamics are very macro, important, determinant of pricing, but i also think that there are places where weve had a major runup in prices and the people buying those those are second homes, those were places that we regional. I think theres going to be pain in some of those markets. And we still have this exodus out of urban centers. Covid accelerated trends that were in the works before covid. I think youre seeing this in urban centers, too. Prices have to come down at some point. You would think. Listen i get that its structurally rigged right now. Things happen in life. I think in order for that to happen, the Unemployment Rate has to go from the current levels now to probably closer to 5 . I think if unemployment starts to trend higher can that happen with corporate profits where they are now . I dont know the answer to that. Theres a discrepancy here. Something needs to give. The fed, what they want to happen, behind closed doors, theyre like, we need the Unemployment Rate between 4. 5 , 5 , and do whatever is in our power to get it there. I know that sounds counterintuitive. People are like, why do they want it to go higher . They want that. And that could break the Housing Market. And theres been so much dialogue about the u. S. Deficit and spending and then it comes back to a Government Shutdown and what not i get back to the u. S. Debt market is the most liquid, but its the highest quality in the world and whose debt do you want to buy . Seriously. You going to go germany is the most conservative economy in europe and this is an economy thats weakening faster than us. Why do you think the dollar is rising . Central bank differentials are what they are, because you just look around the world. I realize there have been Politics AroundCentral Bank Buying of treasuries over the years and you look at what happened to russias reserves and a lot of Central Banks are saying, even if im not going to be russia, that cant happen to me. We have to do something else. The u. S. Treasury market is by far the, you know, the standard in the world, and just not going that fast. And i think people are overreacting here. All right, though we had that huge amount of issuance still to come on the market, with so does everybody. You think europe doesnt . And think about owthe 17 trilln in negative Government Bond debt that was around a year and a half ago. A lot of people are under water, a lot of markets that are going to banepainful. Lets bring in schkylar olso from zillow. Thanks for having me. What finally gives here . Supply demand dynamics at some point, something breaks, right . What is that . Yeah, i mean, i think as Mortgage Rates have continued to go up, you know, as opposed to trending down as maybe six months ago, we were hoping for, weve continued to see new listings pull back, so, youre looking around, you know, a quarter percent down from what was normal in terms of the homes that are dropping into the market. So, dianas totally right there in terms of its a supply and demand imbalance. I agree, as well, when we think, what has to give, the owner has to have an incentive to sell. If i have that low rate, its not a financial opportunity from the Mortgage Market thats going to stop me from moving. So, its either the time happening of getting divorced and having kids or its job loss. And i think thats one of the reasons why right now were kind of its kind of confuse bly optimistic, which makes Mortgage Rates go up, because we dont need those safe assets, you know, and theyre related, the tenyear. But thats going to keep the activity low in Housing Markets. In the existing Housing Markets. Is there a magic number on Mortgage Rates where you see, you know, deals clearing . You know, an increase in listings, you know, an increase in deals in general . Yeah, this is the magic question. At zillow, were tackling this in a lot of different ways. Every quarter, we are aski ing existing owners, are you willing to, or, sell in the next three years, right now, that is highly sensitive to the rate the owner holding. So, the higher the rate is, if they have a rate above 5 , for example, they are twice as likely to want to sell within the next three years. So, not everyone is as deeply locked in. When we think about, what is that magic rate, i think about affordability, so, what share would that typical mortgage payment take out of a typical income nationally speaking . Now that were up, you know, at 7. 3, that share is close to 40 , if you only have 10 down and its close to 37 if you have 20 down. Thats close to not being able to qualify, once you drip down to, say, 6 , it gets a lot more relief. Its karen, thanks for being on. We talk about the 30year a lot, but what is the number that most mortgage holders or borrowers, what is the actual amount of how long of a, you know and what rate, and when did they get that . And how quickly is that loan aging . Oh, yeah. I mean, so, prepandemic, and leading up to this, a vast majority of people did get that 30year fixed rate loan. We had a very small share of buyers during the pandemic, certainly because of low rates, but even prepandemic, that were getting adjustable rate mortgages, so, a vast majority of the folks that, you know, were hoping to lubricate and as their life progresses, theyll release it, they do have that 30year fixed rate loan. The typical amount of time that someone tends to stay is actually much less than that, of course depends on your age and your, you know, time of life, but then youre just thinking about a bit more of a decade. So, in the u. S. , we do overinsure that housing payment with a 30year fixed, but to that end, those that are you can see why they did that, the benefit of someone that locked in a year ago. So, you work at zillow, you dont sound very optimistic, skooilder. Im very sensitive to inventory. Yeah, im very, very sensitive to inventory. I, you know, were talking in generations, when we talk about housing. We talk about fundamental Housing Demand and the strength of that. Were talking about the size of younger adult americans, you know, the millennials, that honestly have the similar aspirations to previous generations, they are facing very different realities, both in the number of homes that are out there to buy, but also in the dollar and cents of it all. Right. So, yeah, im pretty sensitive to the lack of supply. Skyler, thank you for joining us. Skyler olsen, zillow. Guy . Its well, zillow, the stock, did around 30, 180, its bouncing here. Maybe the bounce suggests were in for better times. The Housing Market, it seemed counterintuitive to be bullish in the Home Builders for the period of time we were. It was all about supply demand imbalances, the same way we talk about energy. We thought at a certain point in terms of yields it would break the back of those stocks. Seemingly happened when we got through this 4. 5 level in the tenyear. She mentioned what would cause people to sell, its a divorce or lose your job, and you think about, were going to get this september jobs report next week, and we know were still, you know, soundly below 4 . You know, weve been talking about corporate profits, talking about their ability to pass through, like, inflationary inputs. What comes next is probably another round of layoff. If the economic, you know, environment stays pretty dicey, the visibility is really poor, the geopolitical situation seems kind of dicey. And we could have that. And if we start seeing unemployment, you know, get towards 4 , then youre going to see youre going to see inve inventory. You are going to see pressure on that. And i think that probably coincides when the stock market is probably lower than where it is right now. And that negative wealth effect wont be particularly great, so, again, we look at the stock market, the s p up 11 , equal weight is basically up a little bit or so. It really feels like were in the hands of seven stocks, you know what they are. Meantime, uaw gearing up to announce more strike locations as negotiations with the big three automakers continue. Phil lebeau has the latest on this. Phil . Melissa, couple of pieces of news today moved the shares of stellantis, ford, and gm higher in the middle of the day. Heres one of those pieces of news. Look at shares of stellantis. Stellantis today, according to a source familiar with the uaw, the uaw submitted a counterproposal to stellantis. This is one of those things people are saying, how often are they submitting proposals, counterproposals . Theres always discussions, but this was a formal counterproposal from the uaw to stellantis. No comment from stellantis on what was in that proposal. And look at shares of ford and gm. And the reason were putting this up is because in the middle of the day, there was a report from Bloomberg Citing Sources saying that the uaw was aiming for at least a 30 increase in wages and cost of living adjustments over the life of this contract. Thats significant, because initially the uaw said we want 40 . Now, there was no comment from the uaw about this report. We reached out to them repeatedly, the uaw said it declined to comment on this report, but those are two things that moved shares of gm, ford, and stellantis during the day today. In terms of what to expect tomorrow, its once again shawn fain on facebook live. That will happen at 10 00 a. M. He will give an update. If theres no serious progress, weve heard this line before, there could be more strikes. And if there are more strikes, then those walkouts would start at 12 00 p. M. Eastern tomorrow. And remember, it may be one auto maker, maybe all three, maybe two, maybe none. Were waiting to find out tomorrow. Real quick, want to update you on the total strike, about 12 of the uaw members are currently on strike. The majority of them are at the three final Assembly Plants where the uaw walked out two weeks ago, and then last friday is when about 5,600 walked out from gm and stellantis parts and distribution centers. Guys . Phil, when you think about that counterproposal being 30 plus cost of living adjustments, the original 40 target, was that c. O. L. A. On top of it . If it included it, it seems like the numbers may not be as far apart as we think. Well, one, we do not know that this was a counterproposal. What bloomberg report said was that they aim for 30 of both wages and cost of living adjustments. But you are correct that if you were to factor that in, because what the uaw said, we want 40 . Thats all they said. We believe we should get 40 over the next 4 1 2 years. They doesnt say we believe we should get 40 plus cost of living adjustmentsthat brings up to 40 . You are right, if this is, in fact, true, and again, the uaw declined to comment on this report, that would suggest that potentially, and im throwing a hypothetical out there, you could get an automaker to say, okay, were going to offer you 22 over 4 1 2 years in terms of gross wages increasing and then with cost of living adjustments, totaling 8 over the next 4 1 2 years, that gets you up to 30 . Thats just one possibility, and again, thats a hypothetical that would suggest they might be a little bit closer. Right. Phil, thanks. Phil lebeau. You bet. Tim seal ymseymour, nice bre thats why i was so surprised. Yeah, and to be clear, i think we priced in a lot of this dynamic, in fact, these stocks are probably net up small since the strike began. Gm, on a trailing 12month basis is 4 1 2 times earnings. And i choose a trailing multiple because i think this is really whats at question. Gms been such a wellrun Company Relative to their peers and also i think relative to themselves over the years. I believe they can do that again. I think this stock