| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Annual Rate | 235,000 | 215,365 | 248,625 | 248,296 |
Highlights
Housing starts declined to an annual rate of 215,365 units in January from 248,296 in December, below Econoday's consensus of 235,000. Starts are at their lowest level since September 2020.
Urban starts fell 16 percent, led by a 20 percent drop in multi-unit starts, while single-detached starts were up 3 percent.
The six-month trend for housing starts was down to 259,412 in January from 269,781 in December.
Urban starts fell 16 percent, led by a 20 percent drop in multi-unit starts, while single-detached starts were up 3 percent.
The six-month trend for housing starts was down to 259,412 in January from 269,781 in December.
Market Consensus Before Announcement
Housing starts are expected to slow to 235,000 in January versus 248,625 in December.
Definition
Released by the Canada Mortgage and Housing Corporation (CMHC), the monthly housing starts data capture the annualised number of new residential buildings that began construction during the previous month. Statistics are provided for urban and rural areas, the former with a population of at least 10,000. CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, a survey of these centres is conducted and the estimate revised.
Description
Housing starts are a leading indicator of economic health because building construction produces a wide-reaching ripple effect. This narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. Home builders usually don't start a house unless they are fairly confident it will sell upon or before its completion. Changes in the rate of housing starts tell us a lot about demand for homes and the outlook for the construction industry. Furthermore, each time a new home is started, construction employment rises, and income will be pumped back into the economy.
Once the home is sold, it generates revenues for the home builder and a myriad of consumption opportunities for the buyer. Refrigerators, washers and dryers, furniture, and landscaping are just a few things new home buyers might spend money on, so the economic"ripple effect" can be substantial. Since the economic backdrop is the most pervasive influence on financial markets, housing starts have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the housing starts data carry valuable clues for the stocks of home builders, mortgage lenders, and home furnishings companies. Commodity prices such as lumber are also very sensitive to housing industry trends.
Once the home is sold, it generates revenues for the home builder and a myriad of consumption opportunities for the buyer. Refrigerators, washers and dryers, furniture, and landscaping are just a few things new home buyers might spend money on, so the economic"ripple effect" can be substantial. Since the economic backdrop is the most pervasive influence on financial markets, housing starts have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the housing starts data carry valuable clues for the stocks of home builders, mortgage lenders, and home furnishings companies. Commodity prices such as lumber are also very sensitive to housing industry trends.
