Canada Mortgage and Housing Corp. says the annual pace of housing starts in August slowed compared with July.
The national housing agency says the seasonally adjusted annual rate of housing starts in August was 267,443 units, down by 3% from 275,158 in July.
“Despite the drop, these are still historically high numbers consistent with underlying strength in housing construction,” wrote Shelly Kaushik, an economist with BMO Economics, in a research note. “Demographic trends will likely support underlying strength in the medium term.”
The decrease came as the annual pace of urban starts fell by 3% to 246,771 in August with the rate of multi-unit urban starts down by 4% at 187,602.
Both BMO and TD Economics predict that housing starts will cool later this year and in 2023.
“This reflects rising interest rates (which have boosted financing costs) and declining demand, which should begin to seep into supply,” wrote Rishi Sondhi, economist with TD Economics, in a note. However, “elevated home prices coupled with low levels of unsold new inventories should keep the pace of starts above 200,000 units, representing a fairly solid pace.”
Urban starts of single-detached homes rose by 1% to 59,169 units. Meanwhile, rural starts were estimated at a seasonally adjusted annual rate of 20,672 units.
The six-month moving average of the overall monthly seasonally adjusted annual rate was 267,309 units in August, up from 264,467 units in July.