Canadian Home Builder Confidence Declines in Q1

On Monday, the Canadian Home Builders’ Association (CHBA) reported that builder confidence declined across Canada in Q1, according to its Housing Market Index (HMI), with weakening conditions spreading beyond previously resilient regions.

The HMI, which measures builder sentiment on current and future conditions for ownership housing, showed the single-family index falling 5.5 points to 20.9—just 1.3 points above its all-time low. The multifamily index dropped to a record low for the third consecutive quarter, reaching 13.4.

CHBA said softer conditions are now evident nationwide, with regions such as the Prairies and Atlantic Canada also showing declines. The Prairies recorded their first recent pessimistic reading for multi-family construction, while Atlantic Canada posted its first-ever pessimistic reading for single-family construction since the survey began in 2021.

Shifting market dynamics continue to favor rental construction. Data from the Canada Mortgage and Housing Corporation (CMHC) show that rental units accounted for 56.0% of all urban housing starts in March. This marks a sharp reversal from 2021, when roughly 70.0% of starts were intended for ownership; that share has now fallen below 50.0%.

Labor impacts are also emerging, with 47.0% of builders nationally reporting layoffs among their workforce or subcontractors due to market conditions. In Ontario, that figure rises to 65.0%.