Housing starts in urban areas rose to 214,100 on a seasonally adjusted projected annual rate in February, compared with 195,500 in January, says Canada Mortgage and Housing Corp.

“Starts rebounded nicely in February,” CMHC economist Bob Dugan said Monday in a statement. “Housing demand remains robust, thanks to strength in employment and consumer confidence.”

Rural starts in February were estimated at a seasonally adjusted annual rate of 25,600 units.

Year-to-date actual urban starts were 7.1% lower in February than in a year earlier, CHMC said.

Canadian housing starts jumped 9.5% in February, more or less in line with expectations.

BMO Nesbitt Burns “most regions of the country posted gains from January’s sluggish levels, even storm-hit Atlantic Canada. British Columbia was the exception, although it was a lone source of strength the prior month.”

“Sifting through the recent month-to-month volatility, one is left with a healthy picture of Canada’s new housing market,” TD Bank says. “The gradual moderation in homebuilding activity currently underway should help to keep a lid on new home inventories, and mitigate the risk of bubble developing,” TD notes. “Look for housing starts to hold close to their current levels of 200,000 units throughout 2004. Although we believe that pent-up housing demand from first-time buyers is largely exhausted, the ongoing low interest-rate environment and still-high levels of affordability will remain supportive to activity in the overall housing market.”

“The decline in residential mortgage rates so far this year will likely provide an additional boost to housing starts, although they do appear to be on a slowing trend from their peak in October of last year,” RBC Financial counsels. “However, firm job growth and the healthy state of household balance sheets will keep the housing market healthy even as it comes down from last years sky-high levels.”