Pace of housing starts climbs by almost 2% in August

The pace of new housing starts climbed by 1.9% in August as the housing market rebounded from its recent slowdown.

The seasonally adjusted annual rate (SAAR) of housing starts rose to 226,639 last month from 222,467 units in July, the Canada Mortgage and Housing Corporation said on Tuesday.

On average, economists have expected an annual pace of 215,000, according to financial markets data firm Refinitiv.

The six-month moving average also increased, from 208,931 in July to 218,998 in August.

"August was yet another strong month for new construction, with broad-based gains registered across nearly all provinces," said Rishi Sondhi, TD Bank’s economist. "Moving forward, homebuilding is likely to remain strong through the remainder of this year, as solid demand fundamentals – namely low mortgage rates, healthy population growth and solid labour markets – underpin construction."

The housing market cooled last year due to tighter mortgage qualification rules and a rise in mortgage rates. However, it has started regaining strength this year as offers from lenders for fixed-rate mortgages have moved lower, according to a report by The Canadian Press.

Last month’s increase in the annual pace of housing starts came as the pace of urban starts rose by 2% to 213,663 units. Single-detached urban starts increased by 13.6% to 53,275 units, while multiple-unit urban starts fell by 1.4% to 160,388 units.

Meanwhile, rural starts were estimated at a SAAR of 12,976 units.

In a separate release, Statistics Canada (StatCan) said that the value of building permits issued by Canadian municipalities rose by 3% to $8.3 billion in July, the latest data available. StatCan said that the value of permits for multi-family units rose by 4.2% to $2.8 billion, led by Ontario’s gain, while the value of permits of single-family homes edged down by 0.2%.

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