Pace of housing starts hits double-digit drop in May

The annual pace of housing starts fell by 13.3% in May.

The seasonally adjusted annual rate (SAAR) of housing starts decreased to 202,337 units last month from 233,410 units in April, the Canada Mortgage and Housing Corporation (CMHC) reported on Monday.

The nationwide drop in the pace of housing starts came as the SAAR of urban starts decreased by 14.4% to 186,946 units in May. Multiple urban starts fell by 18.5% to 141,851 units, while single-detached urban starts rose by only 1.8% to 45,095 units.

Rural starts were estimated at a SAAR of 15,391 units.

Meanwhile, the six-month moving average of the monthly SAAR was 201,983 units in May, down from 205,717 units in April.

"The national trend in housing starts decreased in May as a result of continuing decline in the trend for single starts as well as a decline in the trend of multi-unit starts that follows gains in this segment in recent months, in urban areas," said Bob Dugan, CMHC's chief economist. "The decrease in the trend of multi-unit starts reflects a decline in the SAAR level of multi-unit activity in May from the unusually elevated level registered in April, which leaves multi-unit SAAR starts closer to its 10-year average."

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