the market rocketed to a 12.5 month supply. that's more than double the number of homes you'd usually see in a healthy real estate market. all this despite the fact the federal reserve has pumped a trillion dollars into the mortgage market to push borrowing rates way down. 30 year mortgage rates hit 4.42% in recent days. that's believed to be the all-time record low for mortgage rates. that's where we are tonight. joining me with more on what happened here and what it means for the broader market, diana olick of cnbc, she covers housing for us. diana, good evening. >> reporter: good evening, brian. you know, it's houses like this one, perfectly appointed, move-in ready, sitting on the market for over six months. like a quarter of all sellers on the market today, this seller has already lowered the price and it's not moving. why? it's that toxic mix of that expired home buyer tax credit, still high unemployment, and overall lack of confidence that's sent housing into yet another tailspin. the numbers were twice as bad as experts predicted, and their predictions were grim. sales of existing homes plummeted across the nation and in nearly every price range. led by a 35% drop in the midwest. the main culprit, the end of the home buyer tax credit. >> we had the stimulus medicine, now you take the medicine away, and there's a withdrawal in the market. >> reporter: the slower sales pace and increase in sellers pushed supplies to a record high. it will take over a year to sell all the homes on the market today at the current pace. >> this is a sign of concern about the outlook for home prices. if home prices decline, that could bring on a double dip recession. >> reporter: home prices had been stabilizing over the past year, providing a foundation for the recovery. now they're poised to drop again as foreclosures continue to rise. another hit to home equity, another blow to the overall economy. >> people are going to feel the need to save more for their retirement or other needs. that's going to be a further drag on the economy. it's definitely bad news in that respect. >> how long has this been on the market? >> reporter: this oak park, illinois, home went on the market in june, after the owners moved to michigan to start a new business. >> we're looking for somebody with the least little bit of confidence in the future. it's a great house, great neighborhood. >> reporter: they've dropped the house twice and haven't had a single offer. >> we're selling it for less than we bought it for a few years ago. so that's frustrating. >> reporter: even with mortgage rates at record lows and lending loosening up, buyers with cash are stuck on the fence. >> you know the hesitancy is wondering whether the market has hit its bottom. so you try to figure out when exactly is the best time to buy, especially if it's for a long-term investment. >> reporter: with home prices so uncertain, fewer americans are depending on their homes as a nest egg for the future. the question now is, what should they depend on. brian? >> diana olick in one of those homes sitting on the market in chevy chase, maryland, outside washington tonight. thanks. pessimism about the economy boiled over in public in the political arena today. with top republicans and democrats trading accusations over whose fault it is. our chief white house correspondent chuck todd with us from our washington newsroom. chuck, i'll say it with sarcasm, this is what people love about washington, isn't it? >> yeah, that's right. it is finger pointing time. john boehner is the house republican leader. and he gave a big speech on what he would do if he were speaker of the house, should republicans get control of the house in november. and here's what he had to say about the president's economic team. >> president obama should ask for and accept the resignations of the remaining members of his economic team starting with secretary geithner and larry somers, the head of the national economic council. >> reporter: well, vice president biden served as the surrogate for the obama administration, and here's what he said in response to boehner's call. >> they took a $237 billion operating surplus, inherited from the clinton administration, and left us with a $1.3 trillion deficit. and in the process, quadrupling the national debt, all before we literally turned on the lights in the west wing. >> now, it doesn't take a polling expert to tell you the economy is the number one issue for pretty much every american out there. i had one observer tell me, if 2008 was the hope election, 2010 may be known as the fear election, as both republicans and democrats are playing on the fears of voters about the future of the economy to try to win votes in november. brian? >> chuck todd in washington, thanks. one part of president obama's huge stimulus bill that passed last year was a grant program for public school systems to reward them for trying to turn themselves around and reverse poor performance. the education department ran it as a competition, and they called it race to the top. today the winners of the race were announced. our story from nbc's tom costello. >> reporter: it's back to school week in prince georges county, maryland. and at g. james gholson middle school, they're hoping this week marks the school's rebirth. for the first time, dress shirts, ties, a new paint job, and what the co-principals insist is a new attitude at a school that desperately needs it. >> we have scholars in this building. so every child that comes through those doors needs to understand they are a scholar, and we have high expectations for them. >> reporter: for years this middle school was underperforming with big discipline problems. in april the school district fired the administrators and removed half the teaching staff. the kind of aggressive step the obama administration is encouraging. >> first is high standards. as a country we have to stop lying to children, dummying down the standards. raise standards for every single child. >> reporter: it's one reason why maryland was one of nine states along with d.c. to be awarded race to the top grant money today. they follow tennessee and delaware in sharing $4.3 billion. to compete states have been aggressively overhauling their curriculums, adopting new math and reading benchmarks, changing teacher evaluations, and focusing on underperforming schools. nationwide, 25% of kids dropped out before graduating from high school. advocates say race to the top pushes desperately needed reform. but many teachers unions oppose the growth in charter schools and tough new teacher evaluations. among the most dramatic, colorado, which passed a law tieing teacher pay and tenure to student performance. colorado wasn't chosen for a grant today, and the governor isn't happy. >> if you take the land mass of the united states that is sort of west of the appalachian mountains, no state got funded. >> reporter: in fact, the president's home state of hawaii is the only state west of tennessee to receive money. it's now up to congress whether to spend more on race to the top. tom costello, nbc news, washington. it's primary night tonight in two big states. and that finds some major candidates just trying to make it to november, and dealing with challenges they might not have expected a year ago. we have it all covered tonight. we begin with kelly o'donnell in phoenix. kelly, good evening. >> reporter: good evening, brian. john mccain told me it was political instinct and it was harsh words from voters that made it clear he was in trouble early this year. and add to that a conservative tea party challenger in j.d. hayworth and he was in a corner. he had to win over conservative republicans. arizona's blistering heat has matched the political climate for john mccain's toughest primary fight. today republicans decide if he deserves a fifth senate term. to convince them, he's shed the label that once defined him. >> yes, we're mavericks, but does washington need anything else today than a pair who will go and shake it up? >> reporter: mccain's independent streak had been his brand, separating from his party at times. >> i'm not george bush. >> reporter: taking some positions unpopular with conservatives. >> my commitment to address the issue of climate change, comprehensively and globally. >> reporter: but on issues like climate change or campaign finance reform, mccain has gone silent in recent months. primary opponent j.d. hayworth claims mccain only pretends to be conservative. >> when i was running for president, it was, it's not the john mccain i knew. when i was running in the primary, it was it's not the john mccain i knew. i don't know who they're talking about. >> reporter: getting the most scrutiny, mccain stands on illegal immigration. five years ago he argued against a worker program that would require imgrants to learn english and pay fines to stay in the u.s. a moderate position for a republican. >> let them earn citizenship, and i mean earn it. >> reporter: today mccain emphasizes security first. >> you have to have a fence, you have to have surveillance and you have to have people, and then you can get the border secured. >> reporter: he's responded to changing border conditions. his opponents say that to win, mccain has shifted with the political winds. kelly o'donnell, nbc news, phoenix. this is nora o'donnell in miami. here in the sunshine state, political insiders have the edge over big money newcomers in the races for governor and the u.s. senate. in the republican primary race for governor, bill mccolumn has the support of party regulars, but faces a stiff challenge from rick scott, who poured $50 million from his own fortune into the race. >> they have a choice, a career politician, somebody who's voted for tax increases forever. somebody that has never had a private sector job, or me. >> i'm running on my record, and rick seems to be running away from his record. >> reporter: the winner faces the democrat. mudslinging and dirty campaigning have dominated the democratic senate race, which also pits an insider against a wealthy outsider. >> we go from being a busboy and a waiter to living the american dream. >> reporter: jeff green sank $23 million of his own money into the race. but his investments in those controversial credit default swaps left him vulnerable to a charge of profiting in the collapse of the housing market. >> not a single floridian lost a penny because of the investments i made. >> reporter: still, green faces an up hill contest. his close ties to party leaders have worked to his advantage. >> i'm the true candidate for the middle class. >> reporter: the democratic winner will face republican marco rubio and republican turned independent charlie crist in november. and tonight the results are in, and congressman meekes has won the nomination. if he wins he would be the state's first black senator. >> nora o'donnell, miami. part of our political coverage tonight. nora, thanks. those 33 miners found alive in chile after being trapped for 17 days haven't yet been told it could take until christmas to get them out of there. they're huddled in a small section of the mine about 2,000 feet down, and chile is now consulting with nasa about how to keep people alive and sane with just that six-inch tube to use for supplies and communications. the miners have asked for things like food, toothbrushes, cold beer, peaches and drops to soothe their eyes. it takes an hour to lower supplies to them down that pipe, but they are getting messages from their families. sanitation may emerge as a leading issue in their cramped quarters underground. quick update on our hurricane season now. danielle's been downgraded from a hurricane to a tropical storm out there in the atlantic. top winds about 70 miles an hour. it may go back up again, strengthen into a hurricane, but no threat to land as of now. our friends at the weather channel still projecting an active hurricane season this year, with ten hurricanes, five of which are projected to be intense category three or higher. when our broadcast continues in just a moment, a major advance in stem cell research for heart patients. and yet a court decision is also part of this health and science story. what happens when you combine lots of summer tourists, high technology and some record low levels of common sense? for our viewers out west tonight we're covering a wildfire from l.a., and miguel almagguer. >> the fire has already scored some 1,100 acres, the blaze threatening at least 50 homes and forcing many evacuations. the blaze is moving through extremely dry brush, with temperatures soaring into the triple digits. meanwhile in contra koss electra county, a much smaller blaze, about 50 acres is burninging tonight. fortunately at this time the fire is not threatening homes. now back to brian williams with more of nightly news. interesting story, the justice department announced late today it will appeal yesterday's court ruling prohibiting federal funding for embryonic stem cell research. that ruling left a lot of researchers fairly stunned. the director of the national institutes of health said "it pours sand into the engine of discovery." for now, much of that research remains on hold. we get more from our chief science correspondent, robert bazell. >> reporter: dr. chuck murray is in the delicate business of rebuilding severely damaged hearts, and has tried adult and embryonic stem cells in his efforts. >> we're very pragmatic, whatever works best for us. >> reporter: what he has accomplished with embryonic stem cells is remarkable. making new heart muscle cells in a laboratory. these are heart cells that are beating and they were made from embryonic stem cells? >> exactly. we can transform them from these flat cells that sit on the bottom of the dish, to a heart muscle. >> this is the echo of your old heart. >> reporter: this team has already started injecting cells into people. >> is that the valve there? >> this is the valve. >> reporter: this man was awaiting a heart transplant. >> they can become any of the 200 cell types in the body. >> reporter: because of yesterday's court ruling, this research supported by federal money, might have to stop by the end of the year. scientists say much will be lost. >> this really appears to me a very backwards step at a moment in time when we, the scientists and the public at large are anticipating some significant advances in stem cell biology. >> reporter: congress has decreed federal money can't be used to destroy embryos, the first part of making embryonic stem cells. president obama and his two predecessors said that once the cells were removed government money could be used to work on them. the group supporting the ruling say the judge was just following the letter of the law. >> you can't part out the research. embryonic stem cell research relies on the destruction of human embryos. and so we're pleased with the ruling. >> reporter: the ruling does not effect privately funded research. many scientists say without federal funding it will take much longer to learn the life saving potential of embryonic stem cells. robert bazell, nbc news, new york. when we come back, a man who reminded us all what a wonderful world it really is. ♪ ♪ but i can't help falling in love with you ♪ his mom wanted him to be a lawyer, but he wanted to be a musician instead, and we're all better for it. george weiss gave us that song and many others, including "the lion sleeps tonight," inspired by a zulu song. it became a huge hit for the tokens. he went to juilliard, played four different instruments. he was a band leader in the army in world war ii. for sinatra, he co-wrote "oh, what it seemed to be." and oh, what a great song. and among his greatest works, a song for louie armstrong immortalized in barry levinson's film "good morning vietnam." ♪ and i think to myself what a wonderful world ♪ >> george david weiss, a member of the songwriters hall of fame was 89 years old. after 9/11, it went back to being the tallest building in new york. the empire state building has stood alone on that new york city skyline in that part of town for close to 80 years, and now that might be about to change. the new york city council will decide if developers can put up this skyscraper, almost as high and just 900 feet away from the empire state building, just to the west. its owners are calling the proposed newcomer a monstrosity. the owners of the competing empire state building, that is. the fight has fired up the purists, while others say new york city needs the jobs that the new building would bring. when we come back here tonight, why the comforts of home and the great outdoors just don't always mix. i saw some detour signs. >> i didn't see any. >> i saw them when you and mom were trying to fold the map. >> audrey, when they close the road, they put up big signs, like this one. >> an icon to fathers everywhere, the classic clark w. griswald. since that movie was made in 1983, one thing has changed, we americans take a lot more stuff with us on summer vacation, especially electronics. digital cameras, gps locaters smart phones. and as you'll see in our report, that doesn't always make such a smart idea. our report from nbc's george lewis. >> reporter: the grand canyon gets about 4.5 million visitors a year from all over. these days those visitors come laden with technology. the young woman from france with her iphone. the guy from japan balancing video and still camera. and plenty of americans eager to share their pictures with folks back home. using this state of the art smart phone, i can shoot stills, i can shoot video, i can facebook, i can twitter, i can phone a friend. i can use gps to find out where i am at all times. and if i get so absorbed in this gadget i forget the basics of safety, i can get in a lot of trouble. just ask kathy hayes, whose brother-in-law donald spotted a bison in yellowstone. kathy, sensing the perfect youtube moment, followed and started rolling. >> look at the shot of donald getting gored by the buffalo. >> reporter: when the bison got angry and charged, it was kathy, not donald, it went after. >> it was a traumatic experience, so, yeah, don't do what i did. be smart, people. >> you want to stay away from the animals here. >> reporter: ranger ken phillips runs emergency services at the grand canyon, while rescue numbers remain constant, one effect of technology is a spike in false alarms, sent by emergency beacons like the kind skiers use in avalanches. he says most of the last dozen alerts have been for trivial problems, like bad tasting water. >> there were only two where people really sustained an injury that required an emergency response. >> reporter: so the message from the rangers, enjoy the parks. take home lots of digital memories, just remember the safety rules. >> he may not be playing. >> reporter: george lewis, nbc news, the grand canyon. and one more thing this vacation season. a new study out shows a lot of men may have a lot of explaining to do. it says one in four grown men travel with a stuffed animal because they find it calming. the survey was conducted by the british hotel chain travelodge, so the men in our newsroom are convinced this must be a british thing. that for now is our broadcast for this tuesday night. thank you for being here with us. i'm brian williams. we hope, of course, to see you right back here tomorrow evening. good night. -- captions by vitac -- www.vitac.com . we begin with breaking news on the fire tonight we have been following since 5:00 in contra costa county. east of mount diablo, clayton area. a vegetation fire burning for about an hour now. it is on the eastside of mount diablo. initially rural homes threatened in area. is nes the fire was heading uphill towards the area. this is not near clayton.
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