Canadian Housing Starts Move Higher in December, but 6-Month Moving Average Slips

The Canada Mortgage and Housing Corporation (CMHC) announced on Tuesday (1-16-24) that the six-month trend in housing starts was 2.1% lower month-over-month in December, with 249,898 units being reported—down from 255,198 units in November. The “trend” is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada.

The monthly SAAR of total housing starts increased 18% in December to 249,255 units, compared to November’s 210,918 units.

According to CMHC data, the monthly SAAR of total urban housing starts in population centers of 10,000 or greater increased 20%, with 234,705 units recorded. Multi-unit urban starts increased 26% to 191,463 units, while single-detached urban starts decreased 2% to 43,242 units. The estimate for rural starts was 14,550 units.

CMHC says that actual 2023 housing starts were down 7% in centers of 10,000 population and over, with 223,513 units recorded, compared to 240,590 in 2022. This decline is primarily explained by a 25% decline in single-detached starts in 2023.

Adding additional background and analysis to the housing report, CMHC Chief Economist Bob Dugan said:

“Following record and near-record highs in 2021 and 2022, housing starts dipped in 2023, but still significantly outperformed expectations for the year. The decline was driven mainly by a sharp drop-off in single-detached starts and tighter economic conditions affecting multi-unit starts in the year’s final quarter. The recent monthly multi-unit volatility is not surprising as we’re now starting to see 2023’s challenging borrowing conditions and labor shortages in the housing starts numbers and we expect to see continued downward pressure in the coming months.”