Housing starts fell 0.8 percent in April to a seasonally adjusted annual rate of 240,229 units, right in line with Econoday's consensus expectation of 240,000. The estimate for March was little changed at 242,267 from 242,195 initially reported.

The six-month trend for total housing starts declined 2.2 percent to 238,585 units.

Lower multi-unit starts in Ontario explained much of the decline in both the SAAR number and the six-month trend."The multi-unit volatility observed in Toronto, Vancouver, and Montréal in recent months is unsurprising as we continue to see last year's challenging borrowing conditions reflected in multi-unit housing starts numbers," said CMHC Chief Economist Bob Dugan, a trend he expects to continue.

Housing starts are expected to hold steady 240,000 in May versus April's 242,000.

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.