Housing starts were more resilient than expected in August, when they decreased to an annual rate of 252,787 from 255,232 in July, which was revised up from 254,966. Econoday's consensus was at 247,500.

Urban starts declined 1 percent to an annual rate of 233,075, with multi-unit starts down 1 percent and single-detached starts up 2 percent.

Regionally, Vancouver and Toronto areas drove the monthly decline, with starts down 12 percent and 20 percent, respectively, while Montreal recorded a 41 percent surge driven by multi-units.

The six-month trend was up 0.8 percent in August to 244,507.

Canada Mortgage and Housing Corporation's chief economist said that multi-unit projects in the summer were likely financed months before. As a result, the full impact of interest rate hikes has yet to be seen.

Housing starts are expected to slow to 247,000 in August versus July's 254,966 which was higher than expected.

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.

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.