A research report predicts that value of U.S. construction starts will be even next year.

Construction starts for 2019 are predicting to be $808 billion, unchanged with the $807 billion estimated for 2018, according to the Dodge Construction Outlook from Dodge Data and Analytics.

“Over the past three years, the expansion for the U.S. construction industry has shown deceleration in its rate of growth, a pattern that typically takes place as an expansion matures,” stated Robert Murray, chief economist for Dodge Data & Analytics. “After advancing 11% to 14% each year from 2012 through 2015, total construction starts climbed 7% in both 2016 and 2017, and a 3% increase is estimated for 2018.

“There are, of course, mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by the stronger growth for the U.S. economy, some easing of bank lending standards, still healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works,” said Murray.

Single family housing will be unchanged in dollar terms, alongside a modest 3% drop in housing starts to 815,000. There will be a slight decline in homebuyer demand, resulting from higher mortgage rates, diminished affordability, and reduced tax advantages for home ownership as the result of tax reform.

Multifamily housing will slide 6% in dollars and 8% in units to 465,000. Market fundamentals such as occupancies and rent growth had shown modest erosion prior to 2018, which then paused this year due to the stronger economy. However, that erosion in market fundamentals is expected to resume in 2019.

The rise in mortgage rates has forced borrowers into less expensive homes—as purchasing power drops.

A homebuyer with a monthly housing budget of $2,500 a month and a 20 percent down payment could afford to purchase a home for as much as $473,750 at the beginning of the year when 30-year mortgage rates were averaging around 4 percent. Now that rates have climbed above 4.75 percent, that same buyer can only afford a home priced up to $444,000—a loss of $29,750 in purchasing power, according to a Redfin analysis.

Home prices in some of the hottest markets have been inching down over last few months. Prices are still higher than they were a year ago, but price growth is slowing in the coastal markets where homes are sitting on the market longer, more homes are available to choose from, and more sellers are dropping their prices.

"Every fall and winter we see prices decline relative to spring and summer, but this year's seasonal declines have been more extreme as buyers, especially in coastal markets, are finally reaching a limit in terms of how much they are willing to pay," said Redfin chief economist Daryl Fairweather. "Sellers haven't quite come to terms with the fact that they no longer have buyers wrapped around their finger. This push and pull is likely to continue until early 2019 when the home-buying season picks back up."

For those weighing whether to buy a home now before mortgage rates tick up further, or wait for seasonal price declines, Redfin published the attached chart showing how purchasing power changes as mortgage rates rise, on several different monthly housing budgets.

Rates are expected to continue rising through into 2019, which will have a direct effect on the number of homes that are affordable to buyers.

For instance, a borrower who’s looking for a three-bedroom, two-bathroom home. If his monthly house payment budget is $3,500, an increase in mortgage rates from 5.0 percent to 5.5 percent would reduce the number of homes for sale that you could afford by more than 15 percent in Orange County, Calif., Honolulu, or San Jose. In Boston, Seattle, Los Angeles, or San Diego, your selection shrinks by 10 to 14 percent.

Table: Number of Affordable 3-bed, 2-bath Homes For Sale at $3,500 Mortgage Payment

[For this table, Redfin used the relatively high monthly mortgage payment of $3,500, which is enough to purchase a home around the median price in many coastal markets. The data show that even with a budget this high, the selection of homes for sale can be dramatically affected by rising rates.]

With a monthly housing budget of $2,500, if rates rise to 5.5 percent, the number of listings on the market that a buyer can afford decreases by 10 to 20 percent in Sacramento, Long Island, Denver, and Portland, Oregon.

If prices actually fall next year (which is not currently expected in most markets), falling prices could offset the cost of rising mortgage rates. However, the bigger a borrower's budget, the bigger home price drops needed to see in order to balance out increasing mortgage rates. For example, if a budget is $2,500 a month, a borrower would need to pay $18,000 less for the home to offset a rate increase to 5.5 percent from 5 percent. If the budget is  $3,500 a month, the home price needs to be $25,250 less to keep the borrower's payment the same.

SunTrust Banks Inc. has reported net income of $726 million, or $1.56 per average common diluted share. The results include $0.14 per share the result of tax reform as well as the consolidation of SunTrust Mortgage into SunTrust Bank, which was completed in the third quarter.

Diluted earnings per share increased 5%, sequentially, and 47% year-over-year.  For the nine months ended September 30, 2018, earnings per share was $4.34, up 45% on a year-over-year basis.

" Our focus on efficiency continues to drive good results, with the year-to-date tangible efficiency ratio improving by 150 basis points.  Additionally, our commitment to investing in growth to meet more client needs is driving good loan growth which helped offset lower noninterest income," said William H. Rogers,Jr., chairman and CEO of SunTrust Banks, Inc.  "We have revenue momentum going into the fourth quarter of the year, and 2018 is on track to be the seventh consecutive year of growth in earnings per share, improved efficiency, and higher capital returns."

Some highlights from the quarter are as follows:

Mortgage Sector: Mortgage servicing income was $43 million for the current quarter, relatively stable compared to $40 million in the prior quarter, and $46 million in the third quarter of 2017. At September 30, 2018, the servicing portfolio totaled $170.5 billion, relatively stable compared to the prior quarter and a 3% increase compared to the prior year due to MSRs purchased in the first quarter of 2018 which transferred in the second quarter of 2018.

Mortgage production income for the current quarter was $40 million, compared to $43 million for the prior quarter and $61 million for the third quarter of 2017. The $21 million year-over-year decrease was due largely to lower gain on sale margins. Mortgage application volume decreased 9% sequentially and 1% compared to the third quarter of 2017. Closed loan volume decreased 2% sequentially and remained stable year-over-year.

Commercial real estate related income was $24 million for the current quarter, compared to $18 million for the prior quarter and $17 million for the third quarter of 2017. The increase compared to the prior quarter and prior year was driven primarily by higher transaction volume with the Company's agency lending business and higher tax-credit-related income within the Company's affordable housing business.

Loan Performance: Average performing loans held for investment was $145.2 billion for the current quarter, up 1% compared to the prior quarter and prior year driven primarily by increases in commercial real estate, residential mortgages, and consumer direct loans. The sequential increase was also driven by growth in the C&I portfolio. Compared to the prior year, average C&I balances declined by $645 million, driven by the sale of Premium Assignment Corporation on Dec. 1, 2017, which included $1.3 billion of C&I loan balances.

Regulations: Regulatory assessments expense was $39 million in the current quarter, stable relative to the prior quarter and down $8 million compared to the third quarter of 2017. The year-over-year decrease was driven by a reduced FDIC assessment rate resulting primarily from our improved earnings profile and higher levels of unsecured debt.

Income Statement

• Total revenue was down 1% sequentially and stable year-over-year. The sequential decrease was driven by lower noninterest income, which was partially offset by higher net interest income as a result of growth in earning assets.
• Provision for credit losses increased $29 million sequentially and decreased $59 million year-over-year. The sequential increase was driven primarily by a lesser decline in the allowance for loan and lease losses and higher net charge-offs on commercial loans, while the year-over-year decrease was driven by elevated hurricane-related reserves in the third quarter of 2017.

Balance Sheet: Average performing loans held for investment was up 1% compared to the prior quarter, driven by growth in C&I, commercial real estate, residential mortgages, and consumer direct loans.

Asset Quality: Nonperforming loans decreased $60 million from the prior quarter and represented 0.47% of period-end LHFI at September 30, 2018. The decrease was driven primarily by the return to accrual status of certain commercial credits as well as charge-offs of certain commercial loans.

The Mortgage Bankers Association names the recipients of the MBA Opens Doors Foundation annual awards, which recognize those who have made lasting contributions to advance the Foundation's mission of providing mortgage and rental assistance grants to parents and guardians caring for a critically ill or injured child.

The Foundation presented its annual Community Champion Award and two inaugural awards: the Founder's Award and the Spirit Award during MBA's 2018 Annual Convention and Expo in Washington, DC. The 2018 Opens Doors Foundation award winners are:

• Community Champion Award: Susan and Van Stewart, CEO and President, respectively, of SWBC Mortgage.
• Founder's Award: David and Mary Stevens, who along with Dan Arrigoni, founded the MBA Opens Doors Foundation.
• Spirit Award: Sharyn Torrisi-Cartwright, VP of human resources, Pulte Mortgage; Cheryl Paul, SVP and director of mortgage at Settlers Bank; and Susan Brown, SVP for construction and renovation production manager at Umpqua Bank.

"We are thrilled to honor seven outstanding individuals whose commitment to the Opens Doors mission encompasses years of unwavering support and leadership," said Debra W. Still, president and CEO of Pulte Mortgage and chairman of the Foundation's board . "Their selfless efforts and personal contributions have significantly boosted the Foundation's visibility and impact, in turn positively affecting the lives of countless families with injured or critically ill children."

The Community Champion Award, created in 2013, recognizes an individual, group or company that has dedicated significant time and effort to advance the Foundation's mission. Susan and Van Stewart were chosen as this year's winners for their longstanding personal and professional commitment. As an Opens Doors Board member, Susan has willingly stepped up to champion the Foundation at MBA and state MBA events. Together, Susan and Van's personal and corporate commitment to the Foundation exceeds $750,000 since 2013.

Celebrating the prominent role they played in creating the Foundation in 2011, David and Mary Stevens were presented with the first-ever Founder's Award. The inaugural award was established to recognize one or more individuals whose demonstrated action has occurred over a sustained period of time. Honorees exemplify the core values, spirit and essence on which the Foundation was founded.

Since the Foundation's inception in 2011, David and Mary Stevens have made personal and professional commitments that have allowed Opens Doors to thrive. Under David's leadership, MBA's support of Opens Doors has grown exponentially, covering all the Foundation's administrative costs so that every dollar raised can be passed on to families in need. During this same period, Mary Stevens has spearheaded the grants process and served on the grant review committee, reading hundreds of applications from families across the country each month. Her leadership helped to formalize the Foundation's relationships with nine participating hospitals.

Torris-Cartwright, Paul and Brown were jointly presented with this year's inaugural Spirit Award, which recognizes a group of individuals, from one or more organizations, whose enthusiasm and support for the Foundation brought new people and organizations to its roster, while also amplifying the impact it has had on vulnerable families in America.

Torrisi-Cartwright has organized dozens of company-wide events at Pulte Mortgage in support of the Foundation, engaging teams in games, picnics, auctions, and farmer's markets to raise awareness and funds for the Foundation.

Paul and Brown launched a fundraising campaign to rally all Certified Mortgage Bankers (CMBs) to band together and adopt the Foundation as their charity of choice.
"The efforts of our 2018 award winners cements our ability to serve more families across the country for many years to come," said Deborah E. Dubois, president of the MBA Opens Doors Foundation.  "We are immensely grateful for their support and honored to celebrate them."

The generosity of the MBA allows the Foundation to pass on 100% of donations to families in need of assistance. Potential grant recipients are identified through the Foundation's ongoing relationship with children's hospitals in Akron, Ohio; Boston, Massachusetts; Dallas-Fort Worth, Texas; Denver, Colorado; Houston, Texas; northern and southern California, and Washington, D.C.